Reuters — U.S. soybean prices dropped on Wednesday on concern that interest rate cuts in China may not be enough to stimulate growth in the key importer.
Corn slipped on technical selling, and Chicago wheat lost ground on concerns about export competition as the dollar rose, traders said.
Chicago Board of Trade (CBOT) November soybeans fell 12-3/4 cents or 1.5 per cent to $8.65 a bushel, after rising 0.3 per cent the previous session (all figures US$). Fund-selling added further pressure.
“We think prices will remain a bit rangebound until some of the global economic worries start to abate,” said Terry Reilly, senior commodity analyst at Futures International. “Until they do, we’re going to see choppy trade.”
Wall Street advanced on Wednesday while European shares and commodities fell as investors balanced strong U.S. economic data and policy comments with fears about China’s slowing economy.
Recent short-covering in grains dried up, Reilly said. U.S. weather looked generally favourable.
“When you look at the supply side, (soybeans are) looking very healthy so there is no reason to expect any supply constraints… in the short-term,” said Phin Ziebell, agribusiness economist at National Australia Bank.
Soybean futures dropped to their lowest in over six years on Monday on worries about import demand as China’s economy falters, but rose in bargain-buying on Tuesday after China cut interest rates to spur growth.
“We had seen a recovery on Tuesday after the Chinese government’s interest rate moves, but we are seeing a return of negative sentiment about China’s economic prospects,” said Frank Rijkers, agrifood economist at ABN AMRO Bank.
Chicago December wheat fell 5-1/4 cents or 0.8 per cent to $4.94-1/4 a bushel, tumbling for a second straight session. December corn eased 3-3/4 cents or 0.9 percent to $3.73-1/4 a bushel.
— Rod Nickel and Michael Hogan report for Reuters from Winnipeg and Hamburg respectively. Additional reporting for Reuters by Colin Packham in Sydney and Julie Ingwersen in Chicago.