Chicago | Reuters – U.S. soybean futures dropped to their lowest levels in nearly three weeks on Wednesday on expectations for rains to benefit plantings in Brazil, the world’s top exporter.
Concerns about slowing demand from China, the world’s top importer, added pressure to prices.
Rain showers in Brazil will help farmers move forward with planting a soybean crop that is expected to reach a record 100 million tons, after dry weather slowed progress in key areas, traders said.
The improved weather conditions indicate the United States will continue to face stiff competition for export business from South America, they said.
China has been buying U.S. soybeans recently. However, global demand is expected to shift to South America when Brazil and Argentina harvest their crops early next year.
“There are legitimate concerns the recent sales interest we have seen on soybeans will drop off as fast as it started,” said Karl Setzer, risk management team leader for MaxYield Cooperative in Iowa.
Chicago Board of Trade November soybeans fell 1.1 percent to $8.81-1/2 a bushel after trading as low as $8.81, the lowest price for a front-month contract since Oct. 9.
December wheat fell 0.6 percent to $5.06 as the market pulled back from a two-week high of $5.18 on Tuesday. Forecasts for rain in the U.S. Midwest and Plains weighed on prices and should help farmers plant their next crop, traders said.
December corn dropped 1.1 percent to $3.76 a bushel on weak export demand, adding to a 1.3 percent decline on Tuesday.
Chinese customers have temporarily stopped buying distiller’s dried grains from the United States, a byproduct of corn ethanol, amid worries that Beijing may launch another anti-dumping probe into imports of the feed ingredient, industry sources said.
China is the world’s top buyer of DDGs and imports almost all of its needs from the United States, the largest exporter.
“U.S. exports are already pretty slow so this news does not really help,” said Kayla Burkhart, broker for CHS SunPrairie in North Dakota.
Egypt’s General Authority for Supply Commodities, the world’s biggest wheat importer, issued a tender to buy an unspecified amount of wheat from global suppliers. Results are expected on Thursday.
Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore