PARIS/SINGAPORE: Chicago soybeans inched lower on Wednesday, consolidating after multi-month highs this week as investors sought clues as to whether a truce between Washington and Beijing in their trade dispute would revive US soybean sales to China.
Corn, which could also benefit from renewed Chinese demand, ticked lower. Wheat fell more sharply, with news that top wheat importer Egypt is struggling to pay for cargoes adding to negative sentiment about US exports.
The most-active soybean contract on the Chicago Board Of Trade had inched down 0.2 percent to $9.09-3/4 a bushel by 1204 GMT.
A rally after last weekend's US-China trade truce saw the most-active soybean reference reach a near six-month high on Monday and front-month January futures hit a four-month top.
Hopes that the deal, under which China pledged to purchase more US agricultural products, would trigger fresh flows of soybeans and other crops continued to underpin the market.
But a lack of indications of actual Chinese purchases, along with a warning on Tuesday by US President Donald Trump that he would revert to tariffs if the dispute were not resolved during the 90-day truce, have tempered optimism.
"There is uncertainty over the trade war, tensions have resurfaced again with Trump's comments on tariffs," said Phin Ziebell, senior economist at National Australia Bank.
"But at least the two countries are talking about trade, which is a positive sign for the market."
Rising forecasts for Brazil's upcoming soybean harvest were also curbing prices as bumper supplies from the world's biggest soybean exporter could make China less in need of US beans.
Brazilian farmers could produce between 123 million tonnes and 130 million tonnes of soybeans in the 2018/19 crop cycle, a historic record, consultancy Celeres said on Tuesday.
"Such a bumper crop, coming after the record US crop that has just been harvested and coupled with the uncertainty surrounding the trade conflict between the US and China ... promises little in the way of calm on the soybean market," Commerzbank analysts said in a note.
CBOT wheat gave up 0.9 percent to $5.17-3/4 a bushel and corn edged down 0.5 percent to $3.83 a bushel.
Egypt has not issued letters of credit covering 16 recently purchased cargoes, effectively delaying payment and causing confusion amongst suppliers, sources familiar with the matter told Reuters on Wednesday.
The cargoes included one of US wheat, a sale that had raised hopes US shipments would accelerate as supplies in top wheat exporter Russia dwindled.
Russian wheat was the cheapest in a Bangladesh tender on Tuesday while Ukraine resumed grain shipments from the Azov Sea, after a military standoff with Russia, news that suggested Black Sea origins would continue to flow overseas.
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