U.S. grains: Soybeans slide on renewed trade tensions with China

Corn, wheat also fall on heightened trade tensions

CBOT July 2020 soybeans with Bollinger (20,2) bands. (Barchart)

Chicago | Reuters — U.S. soybean futures declined on Friday as renewed concern about trade tensions between the United States and China overshadowed fresh export sales to the world’s largest soybean consumer.

Corn and wheat futures also fell on uncertain feed demand and good weather across much of the U.S. Midwest that signaled another strong planting progress report on Monday.

Soybeans slumped on weak demand for livestock feed, as outbreaks of the novel coronavirus in meat-packing plants have shuttered facilities, backing up feedyards and leading to culling of animals.

“It seems like it’s going to be tough to get meat processing back online at the levels needed,” said Rob Hatchett, a senior economist at Doane Advisory Services.

Soybean futures hit a one-week high on Thursday, climbing two per cent, on word that Chinese state-owned importers bought U.S. soybeans. The U.S. Department of Agriculture on Friday confirmed sales of 264,000 tonnes of the oilseed to China.

The export business, however, was overshadowed by renewed trade tensions. U.S. President Donald Trump said on Thursday the Phase One trade deal with China was now of secondary importance to the coronavirus pandemic, threatening new tariffs on Beijing over the outbreak.

Chicago Board of Trade July soybean futures ended down 5-3/4 cents at $8.49-1/2 a bushel (all figures US$). For the week, the contract rose 10 cents or 1.2 per cent, halting a two-week skid.

CBOT July corn futures settled down 1-1/2 cents at $3.18-1/2 a bushel. For the week, July corn fell 1.4 per cent as worries about demand for corn-based ethanol hung over the market.

CBOT July wheat settled down 7-3/4 cents at $5.16-1/2 a bushel and posted a weekly decline of 2.6 per cent.

Analysts predicted active corn planting heading into the weekend, after an above-average planting pace reported last week.

“They’re going to plant a ton this weekend,” said Mike Seery, president of Seery Futures. “I bet after this weekend, we’re at 50 per cent (planted).”

The U.S. Department of Agriculture said the U.S. corn crop was 27 per cent planted by April 26, ahead of the five-year average of 20 per cent.

Meanwhile, states are beginning to test loosening coronavirus restrictions, which could boost demand for fuel, including ethanol.

“I do think gas futures have bottomed. And that is going to be a downside positive impact toward corn. But I think the horse has already left the barn. Ethanol demand (is) not coming back for several months,” said Seery.

Chicago wheat futures were also lower. Paris-based Euronext was closed, along with much of Europe, for the May Day public holidays.

— Reporting for Reuters by Christopher Walljasper; additional reporting by Nigel Hunt in London and Colin Packham in Sydney.

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