Soybeans slip to seven-week low as speculators unwind bullish bets

CANBERRA: Chicago soybean futures slipped to a seven-week low on Monday as traders liquidated long positions in response to tepid US export demand and the upcoming Brazilian harvest.

Wheat futures fell as large production in Argentina and Australia added to a plentiful supply.

Corn followed wheat lower. The most-active soybean contract on the Chicago Board of Trade (CBOT) was down 0.1% at $10.75-3/4 a bushel, as of 0438 GMT, with CBOT wheat slipping 0.3% to $5.27-1/2 a bushel and corn down 0.1% at $4.40-1/2 a bushel.

All three crops have dipped from multi-month highs seen in November, although corn has held up best amid strong US export demand.

Soybeans reached a 17-month high of $11.69-1/2 in November but have since fallen by around 8% as the scale of Chinese purchases of US beans following a trade truce between the two nations disappointed traders.

Despite more confirmed sales on Friday and Chinese stockpiler Sinograin making room for US beans to arrive, China’s purchases remain well below the 12 million tons US officials said it would buy by year-end.

US soybean exports this marketing year are well below last year’s pace and competition will increase early next year when top producer Brazil begins harvesting a potentially record crop.

Funds built a massive net long position in CBOT soybean futures by mid-November, data from the US Commodity Futures Trading Commission showed, making the market vulnerable to episodes of long liquidation.

Funds were significant net sellers of soybeans and corn on Friday, traders said.

“There is no news around to keep the bulls going,” Rabobank analyst Vitor Pistoia said, adding that prices would likely continue to slide.

Meanwhile, Argentina’s government formalised a cut to export taxes on grains and by-products by publishing the measure in the official gazette.

Argentina is in the middle of a record-breaking wheat harvest.