CHICAGO: US corn and soybean futures fell more than 1 percent on Wednesday and wheat slipped more than 2 percent on sluggish export demand for US grains and a lack of news on US-Chinese trade negotiations, traders said.
"The single biggest potential factor right now that could turn these market dynamics is the China trade talks, but there is currently little fresh news coming out of the talks," INTL FCStone chief commodities economist Arlan Suderman said in a note to clients.
As of 12:32 p.m. CST (1832 GMT), Chicago Board of Trade May soybeans were down 11-3/4 cents at $9.02 per bushel, nearing psychological support at the $9.00 mark.
CBOT May corn was down 4-3/4 cents at $3.71 a bushel. May wheat was down 12-1/4 cents at $4.50-1/2 a bushel but held above a contract low set last week at $4.47-1/4.
Washington and Beijing have been locked in intense negotiations to end the trade war between the world's two largest economies. President Donald Trump, citing progress in talks, last week delayed a planned tariff increase to 25 percent from 10 percent on $200 billion of Chinese goods.
Talks are progressing well via video conference, a senior official at the US Department of Agriculture said on Wednesday.
"Right now, I think there's just a lot of work in getting words down ... a contract or agreement, and that's the current status," said Ted McKinney, the USDA's undersecretary for trade and foreign agriculture services.
Meanwhile, traders noted improving prospects for sizable global grain harvests later this year, at a time when the United States still has ample old-crop supplies.
"Ukraine is planting like crazy, (and) they are saying very little winter damage to the Black Sea winter crops. The EU, their winter grains look great," said Tom Fritz, a partner with EFG Group in Chicago.
Ukraine expects a good grain harvest this year thanks to an early spring and favourable weather, the agriculture ministry said.
"We (the United States) are second-fiddle when it comes to the export market. And as far as this US-China trade deal, the longer it takes to get done, the less chance you are going to see any old-crop business," Fritz said.
Weekly data on US supplies of corn-based ethanol added to bearish sentiment. The US Energy Information Administration said ethanol production fell in the latest week to 1.02 million barrels per day while stocks of the biofuel rose to 24.26 million barrels, the highest in a year and second-most on record.
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