Soybeans turn lower on trade tensions; corn, wheat hold firm

CHICAGO: US soybean futures ended lower on Thursday on worries about global trade tensions threatening exports, analysts said, while wheat and corn firmed on bargain-buying and ideas of tightening global supplies.

Chicago Board of Trade July soybeans settled down 4-1/2 cents at $10.18-1/2 per bushel. July wheat ended up 4-1/4 cents at $5.26-1/4 a bushel and July corn rose 1/2 cent to $3.94.

Soybean futures turned lower after the United States said it would impose tariffs on aluminum and steel imports from Canada, Mexico and the European Union, reigniting fears of a global trade war.

The move came days ahead of a visit by US Commerce Secretary Wilbur Ross to China, the world's biggest soy importer. Ross is expected to try to get China to agree to firm numbers to buy more US goods during a June 2-4 visit to the Chinese capital.

"It's the start of these Chinese negotiations that everybody's worried about. It looks like the tariffs on steel and aluminum on our partners are threatening enough that the market is unsure what will happen in China," said Dan Basse, president of AgResource Co in Chicago.  The CBOT July soybean contract at times dipped below its 200-day moving average near $10.17 as traders adjusted positions on the last day of the month. The contract ended the month down 30 cents, or about 3 percent.

CBOT July corn posted a monthly decline of 6-3/4 cents or 1.7 percent, while July wheat ended the month up 15-3/4 cents or 3.1 percent.

Corn clung to modest gains on Thursday despite the trade tensions with Mexico, a top buyer of US corn. Mexico responded to US steel and aluminum tariffs by imposing wide-ranging "equivalent" measures on farm and industrial products, including pork, apples, grapes and cheese.

Corn found support from bargain buying a day after the July contract hit its lowest level in a month on better-than-expected crop ratings, and uncertainty about US crop weather after an unusually warm May.

"The weather has actually gotten more threatening over the last two or three days," Basse said, adding that US corn and soy crops "look good today, but that is not a barometer of where they will finish."

Wheat firmed, with the CBOT July contract rebounding from a one-week low of $5.15-1/4 a bushel on technical buying and worries about dryness in the Black Sea region, including Russia and Ukraine.

Russia is expected to reduce its 2018 crop of winter wheat and rye by around 10 percent from a year ago due to dry weather, a state weather forecaster said.