CANBERRA: Chicago corn, soybean and wheat futures dipped on Wednesday, after rallying in the previous session when Donald Trump’s first full day as US president passed without him following through on promises to impose tariffs on agricultural trade.
Still, corn and soybeans were near multi-month highs, supported by dry conditions that threaten production in Argentina and rain in Brazil that is slowing the start of the soybean harvest.
Wheat, however, was not far from last year’s lows amid weak demand.
The most active corn contract on the Chicago Board of Trade (CBOT) fell 0.5% to $4.87-3/4 a bushel by 0433 GMT after hitting a 13-month high of $4.91 on Tuesday.
CBOT soybeans dipped 0.1% to $10.66-1/4 a bushel after reaching a 4-month high of $10.68 in the previous session.
Wheat eased 0.4% to $5.56-3/4 a bushel. Prices have struggled to rise far from last year’s low of $5.14.
Traders said Tuesday’s rally was largely because Trump did not immediately impose tariffs on imports from multiple countries.
However, Trump did say he was considering imposing 25% duties on imports from Canada and Mexico from Feb. 1.
Corn and soybean prices had already been rallying, thanks in part to the US Department of Agriculture’s writedowns earlier this month of US 2024 production, which triggered a rush of speculative buying that now leaves the markets vulnerable to long liquidation.
The rallies should falter, particularly in soybeans, because soy production in Brazil is massive, even if it is so far being gathered slowly, said Rabobank analyst Vitor Pistoia.
Corn and soy climb on Argentina drought
“There’s a huge crop coming from Brazil - a huge, endless crop,” he said, adding that soy demand was also weak.
CBOT prices will in the short-term depend on the movement of the US dollar, Pistoia said.
The greenback strengthened to a 26-month high earlier this month, making US farm goods less competitive in global markets, but has weakened slightly since.
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