Chicago | Reuters—U.S. soybean futures hit a two-week low on Wednesday and soyoil futures fell more than three per cent on expectations for plentiful South American soy harvests this year along with uncertainty about demand for soy-based biodiesel fuel, analysts said.
Wheat and corn futures closed higher, rallying on fears about escalation in the war between Ukraine and Russia and risks to the Black Sea grain trade.
Chicago Board of Trade January soybean futures SF25 settled down 8 cents, or 0.8 per cent, at $9.90-1/2 per bushel after a dip to $9.85-1/4, the contract’s lowest since Nov. 6. CBOT December soyoil BOZ24 tumbled 1.56 cents, or 3.5 per cent, to end at 43.28 cents per pound.
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CBOT March wheat WH25 settled up 4-1/2 cents, 0.8 per cent, at $5.72-1/4 a bushel and December corn CZ24 ended up 3 cents, or 0.7%, at $4.30-1/4 a bushel.
Front-month soybean futures dropped back below $10 a bushel this week as traders eyed crop weather in Brazil, the world’s biggest soy producer and exporter. Planting of the 2024/25 soybean crop is winding down and beneficial rainfall has bolstered production prospects.
“I don’t see any threatening weather on the horizon right now,” said Tom Fritz, a partner with EFG Group in Chicago.
Brazil is expected to harvest a record 167.7 million tons of soybeans in the 2024/25 season, oilseed lobby Abiove said on Tuesday.
CBOT soyoil futures were pressured by worries about demand for U.S. biodiesel and declines in Malaysian palm oil FCPOc3 futures. Malaysia raised its December export tax for crude palm oil to 10 per cent, Fritz noted.
Meanwhile, rising tensions in the Black Sea grain export region helped lift wheat and corn futures from early weakness. Ukraine fired a volley of British Storm Shadow cruise missiles into Russia on Wednesday, the latest new Western weapon it has been permitted to use on Russian targets, a day after it fired U.S. missiles.
The news revived concern about crucial Black Sea supply, but as with previous war developments, market reaction was tempered by the absence of immediate disruption to grain trade.
—Additional reporting by Gus Trompiz in Paris and Mei Mei Chu in Beijing
