Chicago | Reuters — U.S. soybean futures fell more than one per cent on Friday to the lowest in a week on rising doubts about a breakthrough in U.S.-China trade talks and forecasts for favourable crop weather across the U.S. Midwest.
Corn and wheat also declined, following soybeans, although both grains closed with modest weekly gains.
News that Chinese officials had cancelled a visit to farms in Nebraska and Montana next week rattled markets that firmed a day earlier. Officials are meeting in Washington this week for deputy-level talks aimed at moving toward a trade war resolution.
Soybeans dropped to session lows after U.S. President Donald Trump said he wants a complete trade deal with China and that agricultural purchases from the Asian nation would not go far enough, adding that a comprehensive agreement would take time.
Chinese importers revived U.S. soybean purchases last week ahead of the trade talks, but sales volumes were minimal. U.S. shipments of soybeans, the most valuable agricultural export product, have plunged over the past year as the top importer largely suspended buying.
“It’s a token of goodwill and not anything that’s going to complete any kind of agricultural deal,” Mark Gold, managing partner with Top Third Ag Marketing said of the purchases.
With Chinese purchases well below normal, grains traders are weighing diminished demand against improving U.S. harvest prospects that will swell supplies over the coming months.
“The weather is near ideal for finishing off the crop and boosting yields back to a decent level. The path of least resistance is lower,” Gold said.
Chicago Board of Trade November soybeans fell 10-1/4 cents to $8.82-3/4 a bushel, ending down 1.8 per cent in the week (all figures US$).
December corn shed two cents to $3.70-3/4 a bushel but ended the week up 0.5 per cent, a second straight weekly gain.
CBOT December wheat was 3-3/4 cents lower at $4.84-1/4 a bushel. The contract ended the week up 0.2 per cent, its third straight weekly gain.
Mild weather is forecast to continue in the U.S. Midwest over at least the next 15 days. Above-normal rain over that term could help crops that have lacked moisture this month but may also delay some early harvesting.
The U.S. Department of Agriculture is due to update corn and soybean crop condition ratings in a weekly report on Monday
Grain traders have also been monitoring dryness in South America and some key wheat production areas around the globe, including Australia and the Black Sea region.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Nigel Hunt in London and Naveen Thukral in Singapore.