Wheat holds near 8-week lows after China cancels purchases from US

CANBERRA: Chicago wheat futures found their footing on Thursday but remained near eight-week lows after China cancelled purchases from the US and as large harvests in Argentina and Australia poured new grain into a well-supplied market.

Soybean futures were flat after falling on Wednesday when the US Department of Agriculture (USDA) confirmed sales to China and “unknown destinations,” and oil prices recovered some ground, supporting biofuel feedstocks.

Corn rose for a second day due to strong US export demand, though pressure from low wheat prices limited gains.

Wheat competes with corn in the animal feed market.

The most-active wheat contract on the Chicago Board of Trade (CBOT) was up 0.1% at $5.06-3/4 a bushel at 0619 GMT, after falling to $5.04 on Wednesday, its lowest since October 23.

CBOT soybeans were unchanged at $10.58-1/4 a bushel, having slipped to a seven-week low of $10.53-1/2 in the previous session.

Corn was up 0.3% at $4.41-3/4 a bushel, heading back towards a six-month high of $4.52-1/4 reached on December 2.

Wheat and soybean prices have slumped about 10% from highs last month amid abundant supply. Soybeans also face lacklustre US export demand and competition from cheaper Brazilian beans.

The USDA said on Wednesday that exporters had cancelled sales of 132,000 metric tons of US white wheat to China.

The reason for the cancellation was not known, but traders said Argentine wheat was available at lower prices. “Argentinian and Australian crops just keep getting bigger and adding to global supply,” said Rod Baker, an analyst at Bendigo Bank Agribusiness Insights.

“Argentina dropped their export taxes also. That’s making them very competitive.”

CBOT prices have likely fallen far enough to encourage buying, Baker said.

“Prices should stabilise around here, and as we move into the new year rise a little.” Progress in peace negotiations to end the war in Ukraine has weighed on wheat prices, but a ceasefire may still be some way off.

Russian attacks on Black Sea ports and energy facilities have reduced Ukrainian wheat exports by forcing the shutdown of some export terminals, Ukrainian farmers’ union UAC said on Wednesday.