US futures mixed as market weighs virus and Chinese demand

PARIS/SINGAPORE: Chicago soybean futures inched higher on Friday while corn and wheat fell after a volatile week in which traders have grappled with booming Chinese demand and mounting coronavirus cases.

The US Department of Agriculture's (USDA) monthly world crop report on Tuesday sparked a rally after it projected US corn and soybean stockpiles at a seven-year low, partly due to Chinese imports, before profit-taking and concerns about coronavirus lockdowns cutting demand weighed on prices.

The most-active soybean contract on the Chicago Board Of Trade (CBOT) was up 0.3% at $11.48-1/2 a bushel by 1221 GMT after reaching its highest since June 2016 at $11.62-1/4 earlier this week.

CBOT corn was down 0.3% at $4.07 per bushel as it fell further from a one-year high of $4.28 mid-week.

Wheat was 0.5% lower at $5.85-1/2, after earlier touching a one-month low.

"With the (USDA) report now behind us and the US harvest near complete, traders are analysing price potential with weather, virus cases, and Chinese demand in mind," brokerage Allendale said in a note.

The USDA's projection of tightening US supplies and rising Chinese imports have put a greater focus on weather conditions in South America ahead of soy and corn harvests in the region in the coming months.

Grain markets were also awaiting weekly US export sales data at 1330 GMT.

After favourable trial results for a COVID-19 vaccine triggered a broad market rally at the start of the week, concern over rising global infections and lockdowns in Europe has since weighed on investor sentiment.

Restrictions in Europe and potentially in the United States could dampen fuel consumption, including for corn-based biofuel.

"The scale of COVID-19 lockdowns in the US and the downside to ethanol production are a real concern for the corn market," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

Wheat traders were weighing declining prospects for Argentina's harvest against expectations for a bumper Australian crop as the market looks to southern hemisphere exporters to help cover brisk demand from importers.