Chicago | Reuters — U.S. soybean futures closed at their lowest level in more than two years on Monday while corn fell to fresh contract lows on strong U.S. crop prospects and worries about trade fights with China and other main export partners.
Wheat also retreated as rising supplies from the U.S. winter crop harvest overshadowed worries about weather-reduced crops in France and Russia.
Fund selling weighed on grain markets in general, along with a stronger dollar which makes U.S. shipments less competitive globally.
“With the start of a new month, money flows are more of a factor today. Funds have aggressively moved to sellers of grains in recent weeks and that trend is continuing today,” said Terry Linn, analyst with Linn + Associates.
Chicago Board of Trade September corn futures fell 12-1/2 cents, or 3.4 per cent, to $3.47 a bushel (all figures US$). July 2018 through May 2019 futures set life-of-contract lows.
CBOT August soybeans were down 10 cents, or 1.2 per cent, at $8.53-1/2 a bushel. Heavily-traded November fell 10-1/2 cents to $8.69-1/2, the lowest closing price for an actively traded contract since March 2016.
Grains markets are monitoring news on trade tensions with China, the world’s top soybean importer, and other U.S. trading partners including Mexico, Canada and the European Union.
Beijing is set to raise tariffs on U.S. soybeans on Friday to a level that is expected to diminish Chinese demand for U.S. shipments.
U.S. President Donald Trump also threatened to take action against the World Trade Organization on Monday after reports that he wanted to withdraw from the global trade regulator.
The trade turmoil coincides with strong production prospects for the U.S. corn and soybean harvest following generally good early-season crop weather.
“If we don’t get an eleventh-hour resolution with China, there’s very little to suggest we should be trading higher because we will have bigger supplies. Ending stocks are likely to grow with very good growing conditions through most of the Midwest,” said Brian Hoops, analyst with Midwest Market Solutions.
After the close, the U.S. Department of Agriculture reported corn and soybean crop conditions slipped lower in the latest week but remained near historic highs.
Wheat futures shrugged off a bullish French wheat crop forecast from analyst Strategie Grains and concerns about weather damage to Russia’s crop.
CBOT September wheat was down 21 cents, or 4.2 per cent, at $4.80-1/4 a bushel in the steepest drop for a most-active contract in almost a year.
— Karl Plume reports on agriculture and commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.