U.S. soybean futures fell by more than 1 percent on Friday, giving up all of Thursday’s rally and more, as Brazil’s currency fell, making Brazilian soy more competitive on the global market, analysts said.
Corn and wheat followed soybeans lower.
As of 12:47 p.m. CDT (1747 GMT), Chicago Board of Trade January soybeans were down 11-3/4 cents at $9.87-1/2 per bushel, retreating from Thursday’s 1-1/2 week high of $10.00-1/2.
CBOT December corn was down 2-1/2 cents at $3.48 a bushel and December wheat was down 2 cents at $4.24 a bushel.
Soybeans led the way down, pressured by a dip in the Brazilian real, which makes soy from the South American country more attractive to big buyers like China. A softer real also encourages Brazilian farmers to sell stockpiled soybeans, which are priced in dollars.
“That weaker Brazilian real makes us worry about our export business. And we had a reversal higher in the U.S. dollar,” said Ted Seifried, chief market strategist with Zaner Ag Hedge.
The U.S. dollar firmed Friday on strong manufacturing and services data, in theory making U.S. grains and soy less competitive on the world market.
Brazil is expected to win a larger share of China’s soybean imports in coming months, hitting U.S. exporters during the peak of their traditional post-harvest marketing season as the world grapples with a fifth consecutive bumper crop.
China is expected to buy about 5 million tonnes of soybeans from Brazil for the fourth quarter of 2017, two senior trade sources said, double the 2.49 million tonnes shipped over the same period last year.
Additional pressure on CBOT futures stemmed from hedge-related selling ahead of a harvest weekend in the Midwest. The U.S. soybean harvest was 83 percent complete by Oct. 29, close to the average pace, but the corn harvest was only 54 percent complete, lagging the five-year average of 72 percent, the U.S. Department of Agriculture said.
“We are still in the harvest, and we have been seeing on the last couple of Fridays a little bit of pre-weekend harvest pressure,” Seifried said.
CBOT wheat traded higher in early moves, rebounding from contract lows set earlier this week. News that private exporters sold 300,000 tonnes of U.S. hard red winter wheat to Iraq lent support. But wheat futures turned down as soybeans sagged.
For the week, January soybeans were nearly flat, December corn was down about a penny a bushel and December wheat was down about 4 cents, or 1 percent.