Soy to 1-week low as China sale fails to impress, wheat climbs

CHICAGO: US soybean futures fell to a one-week low on Thursday as confirmation of a 1.13 million-tonne US soybean sale to China failed to impress traders who are shifting their focus to burdensome US and global supplies, analysts said.

Wheat futures neared a two-month top, supported by signs of rising global prices, while corn futures were little changed.

As of 12:22 p.m. CST (1822 GMT), Chicago Board of Trade January soybeans were down 9-1/2 cents at $9.10-1/2 per bushel.

CBOT March wheat was up 11-1/4 cents at $5.37-3/4 a bushel, its highest since Oct. 19. March corn was down 1/2 cent at $3.84-3/4 a bushel.

Soybeans fell to session lows after the US Department of Agriculture said private exporters sold 1.13 million tonnes of US soybeans to China, the first significant purchases in more than six months after a US-China trade truce was reached on Dec. 1.

Traders said the sales fell short of expectations, triggering a sell-off in futures. Both the CBOT January and March contracts had rallied about $1 per bushel since September, fueled in recent weeks by anticipation that China might return to the US soybean market.

"The trade may have been surprised that the number wasn't bigger initially," said Joe Vaclavik, president of Standard Grain, a Tennessee-based brokerage.

"It's a start, but it's not nearly enough to fix our problems in regards to soybeans and a soybean oversupply in this country," Vaclavik said.

The USDA has forecast that US soybean stocks at the end of the 2018/19 marketing year will reach a record-high 955 million bushels. The USDA projected world soy ending stocks at 115.33 million tonnes, nearly double the total from five years earlier.

"It's a very ugly supply outlook. People are finally realizing that," said Terry Roggensack of the Hightower Report.

Wheat futures rose on expectations of tightening global supplies and improving export demand for US wheat as shipments from rivals Russia and Ukraine begin to slow.

The USDA reported weekly export sales of US wheat at 754,000 tonnes, the biggest tally since August.

Iraq signed an agreement with the United States to import US wheat and rice. And traders were still digesting Wednesday's Egyptian wheat purchase at prices that were up $4 to $6 per tonne from last week.

"The big thing is world prices moving higher. And export sales were decent this morning," said Tom Fritz, a partner with EFG Group in Chicago.

Worries about the size and quality of Argentina's wheat crop lent support. The Buenos Aires Grains Exchange lowered its forecast of Argentina's wheat harvest to 19.0 million tonnes, from 19.2 million previously.