U.S. grains: Soybeans down on profit-taking before USDA data

(Scott Bauer photo courtesy ARS/USDA)

Chicago | Reuters — U.S. soybean futures dropped two per cent on Thursday, the steepest decline in 2-1/2 months, on profit-taking tied to lower veg oil prices and extended weather outlooks for rainfall in Argentina, traders and analysts said.

U.S. President-elect Donald Trump’s nomination of Oklahoma Attorney General Scott Pruitt to run the nation’s Environmental Protection Agency also sparked worries of reduced support for corn-based ethanol and soy-based biodiesel.

U.S. renewable fuel credits fell sharply following the EPA news.

Chicago Board of Trade January soybean futures shed 22 cents to settle at $10.27 per bushel, reversing three days of gains (all figures US$).

Commodity funds were net sellers of 15,000 soybean contracts, traders estimated.

Brazil’s government crop supply agency estimated the country’s soy harvest at a record 102.45 million tonnes. Dry parts of Argentina may see rains within the next two weeks, meteorologists said.

Also, the U.S. Department of Agriculture on Friday is expected to boost supply expectations for Brazil and Argentina soybean production and narrowly reduce U.S. soy ending stocks, according to Reuters’ analyst poll.

Weaker soyoil and palm oil prices added to pressure on soybeans, according to EFG Group analyst Tom Fritz.

The USDA soybean data will “be a reminder that we have the supply to meet what is really good demand, and then some,” Fritz said.

CBOT March wheat jumped 7-1/4 cents, or 1.8 per cent, to $4.08-1/4 per bushel, while CBOT March corn fell 4-1/2 cents, or 1.3 per cent, to $3.53-1/2.

Funds bought a net 4,000 wheat contracts and sold 8,000 corn contracts, traders estimated.

Wheat climbed after Saudi Arabia said it was seeking global offers for 715,000 tonnes of hard wheat for delivery between Feb. 1 and April 10.

India also scrapped its 10 per cent wheat import duty on Thursday after two years of drought depleted stocks and raised prices. Traders said the move could lift import purchases to the highest in a decade.

“The Indian government’s decision is likely to generate more wheat imports at a time of generally weak global demand,” said Matt Ammermann, commodity risk manager for INTL FCStone. “Now the question is all about timing on how much wheat and when India will import.

“Ukrainian wheat is still looking good, but U.S. wheat is looking competitive against Russia and Argentina in FOB terms.”

Indian wheat prices hit a record high last month. The nation’s finance minister told parliament the latest cut was effective immediately, with no end date.

— Michael Hirtzer reports on ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Michael Hogan in Hamburg, Colin Packham in Sydney and Karl Plume in Chicago.


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