CBOT soybeans sink as big trade aid payment seen fueling more planting

CHICAGO: Chicago Board of Trade (CBOT) soybeans reversed early gains and closed lower on Tuesday as a media report that the Trump administration is considering large aid payments for soy farmers fueled fears of expanded planting of the crop this spring.

* The White House is considering payments of $2 per bushel for soybeans as part of a $20-billion aid package to offset farmers' losses from the trade war with China, Bloomberg reported on Tuesday. The aid was seen encouraging more soy planting at a time when supplies are already record-large.

* CBOT July soybeans settled down 9-3/4 cents at $8.22 per bushel after peaking at $8.46-1/2.

* CBOT July soymeal ended $2.00 lower at $295.30 per short ton while July soyoil fell 0.36 cent at 27.14 cents per pound.

* Early gains stemmed from a slower-than-expected soybean planting pace in a weekly US Department of Agriculture report that showed farmers had seeded just 19% of their intended soybean acreage as of May 19. The five-year average is 47%.

* Showers over the next week are threatening to slow corn planting and may trigger a larger shift from corn to soybean acres.

* The lack of progress in US-China trade talks also hung over the soybean market.