BEIJING: Chicago soybeans, corn and wheat fell on Friday as Argentina cut taxes on grain exports, but the contracts looked set to extend their run of weekly gains partly due to dry weather hitting production in the South American nation.
The most-active corn contract on the Chicago Board of Trade (CBOT) was down 0.61% at $4.87 a bushel, after hitting its highest in 15 months in the previous session.
For the week, it is up 0.47% in its third consecutive climb. CBOT soybeans fell 0.96% to $10.55 a bushel.
It has gained 2% this week in what would be its fifth straight weekly rise.
Wheat fell 0.68% to $5.50-2/8 a bushel by 0441 GMT.
It has gained 2.1% this week, heading for its third consecutive climb.
Agricultural powerhouse Argentina will lower taxes on its grains exports Monday onwards and until June, delivering on a campaign promise from libertarian President Javier Milei.
Argentina is the world’s top exporter of processed soy oil and meal, the No. 3 for corn and a major producer of wheat.
In a boost to Argentina’s competitiveness in the global market, taxes on soy exports will fall to 26% from 33%, tax rates on derivatives of the oilseed will fall to 24.5% from 31%, and for both wheat and corn they will go to 9.5% from 12%.
The tax cuts will encourage farmers, who have been grappling with a drought and low crop prices, to release their soy and corn stocks, traders said.
Chicago soybeans slip on Argentina rain forecasts
Hot weather and insufficient rainfall in Argentina in recent weeks have damaged crop growth and led to a rise in prices.
That prompted the Buenos Aires Grains Exchange to announce cuts to estimated yields for Argentina’s 2024/25 soybean and corn crops by 1 million metric tons each to 49.6 million tons and 49 million tons, respectively.
In neighbouring Brazil, the 2024/2025 soybean crop is expected to reach a record 170.7 million tons, hEDGEpoint Global Markets said on Thursday, offsetting some concerns over the impact of production cuts in Argentina on global supply.
Market players are still cautious of US President Donald Trump’s plans to impose tariffs on major agriculture trading partners, including China and Canada, which could reshape global trade flows.
Trump’s pick to lead the US Department of Agriculture, Brooke Rollins, said on Thursday she would consider direct payments to farmers to offset losses from proposed tariffs, modeled after the approach taken in Trump’s first term.
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