Chicago | Reuters — U.S. soybean futures rose modestly on Wednesday as strength from global equity markets and soyoil futures offset worries about export demand for U.S. oilseeds, traders said.
Wheat futures firmed on technical buying. But corn drifted lower in rangebound trade as uncertainty about demand hung over the market.
Chicago Board of Trade March soybeans settled up 1/2 cent at $8.80 per bushel (all figures US$). March wheat ended up 4-3/4 cents at $5.62 a bushel while March corn finished down 1-1/2 cents at $3.80-3/4.
Wall Street markets set the early tone, surging on expectations for more central bank stimulus and reports that scientists have developed an effective drug against the fast-spreading coronavirus.
Soybean futures drew further support as a jump in Malaysian palm oil values buoyed CBOT soyoil futures, and as heavy rains threatened to slow Brazil’s soybean harvest.
Still, questions about export interest from top global soy buyer China lingered, quelling rallies in CBOT grains and soy.
“We have a bit of support from gains in stock markets, but there is not much potential for soybean prices to go higher, certainly not for the moment, as the virus is curbing demand,” said National Australia Bank economist Phin Ziebell.
White House economic adviser Larry Kudlow said on Tuesday that the coronavirus would delay a surge in U.S. exports to China expected from the Phase One trade deal.
That agreement, signed on Jan. 15 and taking effect on Feb. 15, suspended a new round of U.S. tariffs in exchange for Chinese purchases of agricultural, energy and manufactured goods and services.
“The coronavirus has given China a get-out-of-jail card on their obligations. Now they have leeway in meeting those obligations,” said Bill Lapp, president of Nebraska-based Advanced Economic Solutions.
Corn futures declined, unmoved by supportive weekly ethanol data. The U.S. Energy Information Administration said U.S. output of corn-based ethanol in the latest week jumped to 1.08 million barrels per day, from 1.03 million the previous week, while stocks fell to 23.47 million barrels.
Officials and traders in Ukraine do not expect the coronavirus epidemic to have an impact on the country’s grain exports to China, although delivery logistics have been disrupted.
China is a major importer of Ukrainian corn.
Wheat futures firmed in technical trade, with the CBOT March contract staying inside of Tuesday’s trading range.
Statistics Canada reported total Canadian wheat stocks as of Dec. 31 at 24.982 million tonnes, down from 25.109 million a year earlier but above the average estimate in a Reuters analyst poll of 24.6 million tonnes.
— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore.