Chicago | Reuters — U.S. soybean futures fell on Thursday on poor export demand coupled with declines in global equity markets tied to worries about an economic slowdown due to the COVID-19 coronavirus, analysts said.
Corn followed soybeans lower while nearby Chicago Board of Trade wheat futures clung to modest gains, supported by inter-market spreading.
CBOT May soybeans settled down 10-1/4 cents at $8.97 per bushel, after hitting a five-week high of $9.12-1/2 (all figures US$). The contract recorded an “outside day” lower by trading above Wednesday’s high and then falling below Wednesday’s low, a bearish chart signal.
CBOT May corn ended down 3-1/4 cents at $3.81-3/4 a bushel but stayed inside of Wednesday’s trading range.
CBOT May soft red winter wheat finished 1/2 cent higher at $5.18-3/4 a bushel while K.C. May hard red winter wheat fell seven cents to end at $4.46-1/4.
Along with the macroeconomic woes that plagued Wall Street, soybean futures fell on disappointing export sales. The U.S. Department of Agriculture reported U.S. soybean export sales in the week to Feb. 27 at 346,400 tonnes, below a range of trade expectations. Bookings to top global buyer China totaled just 6,012 tonnes, the lowest since September.
“Export sales were horrible for beans. People are getting a little exasperated waiting for Chinese buying,” said Tom Fritz, a partner with EFG Group in Chicago.
As part of a Phase One interim trade deal signed in January, China promised to buy at least an additional $12.5 billion worth of U.S. farm products in 2020 and at least $19.5 billion in 2021 over the 2017 level of $24 billion.
Agriculture Secretary Sonny Perdue on Wednesday predicted China will come into the U.S. market for soybeans in late spring and summer.
However, the demand outlook for soybeans was clouded.
“Chinese demand is being dampened by the outbreak of African swine fever and by coronavirus, so it is questionable whether China will really reach its ambitious purchase targets,” Commerzbank said in a note.
Traders shrugged off news that some of Argentina’s farmers planned a four-day sales strike next week to protest a soy tax hike.
Argentina’s government on Tuesday increased export levies on soybeans, soymeal and soyoil to 33 per cent from a previous 30 per cent to boost revenues.
CBOT corn was pressured by ballooning U.S. stocks of corn-based ethanol fuel, combined with fears of a slowdown in the transportation sector due to the coronavirus. The U.S. Energy Information Administration on Wednesday reported ethanol stockpiles at a record-high 24.964 million barrels.
— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.