US wheat futures chafe on sluggish US exports, soy sags

CHICAGO: Chicago Board of Trade grain and soybean futures all soured on Tuesday as US wheat sellers failed to nab any export sales and traders waited impatiently for news on the latest of talks on the US-China trade war.

US wheat futures dropped to new multi-month lows on Tuesday, as grain traders monitored bearish technical signals as well as falling prices in the global cash wheat market.

"If you're looking for reasons to slam wheat down right now, it's not hard to find them," said Jack Scoville, a futures market analyst at the Price Futures Group.

Case in point: the recent wheat tenders. Instead of opting for US wheat, Syria's General Establishment for Cereal Processing and Trade (Hoboob) bought 200,000 tonnes of Black Sea origin wheat in its latest international purchasing tender, a government source said.

Meanwhile, trading house Agrocorp secured a tender to supply 50,000 tonnes of wheat to Bangladesh, and is expected to draw grain from Russia to fulfil the deal, according to officials with the state grains buyer.

As of 11:45 a.m. CDT (1745 GMT), Chicago Board of Trade March wheat was down 12 cents at $4.92 per bushel, after falling to $4.91-1/2, the contract's lowest level in more than a year and the lowest for a most-active contract since Oct. 31.

Technical selling also sent corn futures to the lowest in several months and sent soybean futures prices falling.

The most-active soybean contract on the Chicago Board of Trade was down 11-1/2 cents at $8.96 a bushel at 11:53 CDT (1753 GMT), after having firmed on Friday. Markets were closed on Monday for a US public holiday.

Corn was down 5-1/2 cents at $3.69-1/4 a bushel, having closed unchanged on Friday.

Traders said that grain and oilseed futures were also being pressured by mounting concerns about exactly how much soybean acreage US farmers will plant this spring, as South American weather improves and export competition from Brazil and Argentina shows little signs of waning.

The US Department of Agriculture is expected to release its forecasts for US 2019 corn, soybean and wheat plantings this week at its annual Outlook Forum.

China also said on Tuesday that it will continue to diversify its agricultural imports channels, and increase its own domestic soybean planting acreage, according to a government policy statement published on Tuesday.

The report comes as a new round of talks is underway between the United States and China to resolve their trade dispute, with follow-up sessions at a higher level later in the week.

The talks follow a round of negotiations that ended last week in Beijing without a deal but which officials said had generated progress on contentious issues.

"Soybeans and corn remain strongly focused on the outcome of the US/China trade talks this week," said Matt Ammermann, commodity risk manager with INTL FCStone.