Soybeans steady after 6-day slide, China virus risks curb rebound

• The most-active Chicago Board of Trade (CBOT) soybean contract was up 0.5pc at $8.99-1/4 a bushel by 1208 GMT.
• Palm oil rebounded sharply on Wednesday, helping other oilseed markets like soybeans regain some ground.
• The U.S. soybean market is also being capped by the prospect of a bumper crop in Brazil.

SINGAPORE: Chicago soybean futures edged higher on Wednesday as oilseed markets recovered from losses fuelled by the coronavirus outbreak in China, but concern over the economic impact of the disease kept grain prices in check.

U.S. corn ticked lower after rising on Tuesday on the back of brisk export demand, while wheat slipped further as the cereal market continued to retreat from one-year highs struck last week.

The spread of the coronavirus has added to doubts about Chinese demand after an absence of fresh purchases in the wake of the "Phase 1" trade deal signed by Washington and Beijing on Jan. 15.

"There is uncertainty about the virus, it is tough to react given the information we have," said Phin Ziebell, agribusiness economist at National Australia Bank.

"We have to wait and see what impact it will have on demand."

The most-active Chicago Board of Trade (CBOT) soybean contract was up 0.5pc at $8.99-1/4 a bushel by 1208 GMT.

It dropped to its lowest since Dec. 12 at $8.88-1/4 a bushel on Monday and touched that level again on Tuesday.

The death toll from the virus outbreak rose to 132 on Wednesday with nearly 1,500 new cases, heaping pressure on Beijing to control the disease.

With Chinese markets closed for the Lunar New Year holidays, investor reaction was felt in overseas markets, with Malaysian palm oil futures tumbling as much as 10pc on Tuesday.

However, palm oil rebounded sharply on Wednesday, helping other oilseed markets like soybeans regain some ground.

Possible disruption from China's health emergency has fuelled demand worries.

"The market is still awaiting signs of an increase in Chinese demand as promised in the signing of the Phase 1 trade deal," brokerage Allendale said in a note.

China is the world's largest soybean importer.

The U.S. soybean market is also being capped by the prospect of a bumper crop in Brazil.

Brazilian farmers have harvested 4.2pc of their planted area through Jan. 23, although that was less than the 13pc seen a year earlier, consultancy AgRural said on Monday.

The U.S. corn market has drawn some support from exports.

Private exporters reported the sale of 124,335 tonnes of U.S. corn to Mexico for delivery in the 2019/20 marketing year, the U.S. Agriculture Department said on Tuesday.

It was the sixth flash sale of corn since Jan. 23.

CBOT corn inched down 0.1pc to $3.86 a bushel.

CBOT wheat was down 0.8pc to $5.65 a bushel, as it continued to ease from a 1-1/2 year high struck last week amid brisk overseas demand and rising prices in top exporter Russia.