CANBERRA: Chicago soybean futures edged lower on Wednesday, although they hovered near one-month highs after Brazil’s crop agency cut production forecasts for the country, testing speculative investors who have bet heavily on further price drop.
China Jan-Feb soybean imports fall to 5-year low
Corn futures were flat and wheat futures edged higher, after fallen on Monday to their lowest since August 2020 amid lower Russian export prices and cancelled US sales.
Fundamentals
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The most-active soybean contract on the Chicago Board of Trade (CBOT) was down 0.2% at $11.93-3/4 a bushel by 0039 GMT, having hit $11.97 on Tuesday, its highest since Feb. 13.
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CBOT corn was unchanged at $4.41-3/4 a bushel after climbing to $4.45 on Tuesday, its strongest since Feb. 6.
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Both crops, however, are down this year and fell to their lowest levels since 2020 last month.
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Wheat rose 0.5% to $5.50 a bushel, not far from Monday’s low of $5.24.
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Crop agency Conab lowered its projections for Brazil’s soybean production by 2.6 million metric tons to 146.858 million metric tons and for its corn production by nearly a million tons to 112.753 million tons due to adverse weather conditions.
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However, plentiful Brazilian soy supply after a record harvest last year has pushed down prices, and some Brazilian soybean farmers are hoarding new crops in the hope that prices improve, a survey found.
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Also pushing down soy prices are expectations of a bumper Argentinian crop. Still, intense rains in Argentina are beginning to leave the soil too wet in key agricultural areas, which could also make it harder to harvest.
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Speculators have bet heavily on lower prices for soybeans, corn and wheat, leaving the markets vulnerable to bouts of short covering that push prices higher. * Commodity funds were net buyers of CBOT soybean and corn futures on Tuesday and net even in wheat, traders said.
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In other crops, Ukraine’s 2024 combined grain and oilseed harvest could shrink to 76.1 million metric tons from 82.6 million tons last year and 107 million tons before Russia invaded, Ukrainian grain traders union UGA said.
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The UGA said the 2024 harvest could include 26.3 million tons of corn, 20 million tons of wheat and 13.7 million tons of sunflower seeds.
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Falling Russian wheat export prices and hefty global supplies continue to pressure wheat futures and reduce the competitiveness of US wheat on the global market.
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US exporters cancelled sales of more than 504,000 metric tons of wheat destined for China within the past week.
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Meanwhile, Indian wheat inventories held in government warehouses dropped to 9.7 million tons, the lowest since 2017, after two straight years of low crops.
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