PARIS/BEIJING: Chicago soybean futures steadied on Tuesday, as renewed strength in crude oil prices linked to war headlines from the Middle East helped counter doubts over Chinese demand that had sent prices tumbling on Monday.
Corn also regained ground while wheat ticked down.
The most-active soybean contract on the Chicago Board of Trade was up 0.4percent at USD11.59-1/4 a bushel, as of 1225 GMT. Soyoil, widely used in biofuel, climbed 1.9 percent.
Soybeans fell by their 70 cent daily trading limit on Monday as news that US President Donald Trump may delay a planned visit to China dampened expectations of further Chinese purchases of US soybeans.
“Soybeans got knocked lower yesterday after Trump requested a delay in meetings with Chinese President Xi,” Peak Trading Research said in a note, adding: “Hedge funds remain cautiously long in most agriculture markets due to energy correlations, inflation hedging, and higher input costs.”
Crude oil rose after Iranian attacks on the UAE heightened concerns about supply disruption due to US-Israeli war with Iran. Oil fluctuations impact grain markets because biofuel is a major outlet for soyoil and corn, and as oil influences commodity investment flows.
Trump told the Financial Times in an interview published on Sunday that he could delay his summit with his Chinese counterpart as he pressed Beijing to help unblock the Strait of Hormuz. He then said on Monday he wanted to the meeting, planned for end-March, by about a month due to the Iran war.
The potential postponement raised doubts over whether China, the world’s largest soybean importer, will buy more US soybeans this season after booking 12 million metric tons in recent months under a trade truce.
However, other news pointed to strong domestic demand for US soybeans. The country crushed a higher-than-expected amount of soybeans in February, according to monthly National Oilseed Processors Association data issued on Monday.
Trump has invited farmers and biofuels producers to an event at the White House on March 27, CBS News reported on Tuesday. The administration’s plans to issue a final rule before the end of March on biofuel blending quotas have raised expectations for additional volumes for feedstocks like soyoil. CBOT wheat eased 0.4percent to USD5.94-3/4 a bushel and CBOT corn added 0.3percent to USD4.55-1/4 a bushel.
Wheat traders are monitoring dry conditions in the US Plains as crops enter spring growth phases.