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GRAINS-Soybeans sag on U.S. demand worries; wheat ends higher, corn firm

Edmund Blair, Steve Orlofsky and Peter Cooney)

(Updates with closing U.S. prices) CHICAGO, Sept 5 (Reuters) - U.S. soybean futures fell more than 1% on Thursday on concerns about burdensome supplies and weak export demand as the U.S. trade war with China continues, analysts said. Wheat futures rose on short-covering and worries about drought in Australia, and corn edged higher, despite bearish weekly U.S. ethanol statistics. Chicago Board of Trade November soybeans settled down 14 cents at $8.61-1/2 per bushel after dipping to $8.58-1/4, a one-week low. CBOT December wheat ended up 5-1/2 cents at $4.66-1/4 a bushel and December corn finished 1/4 cent higher at $3.58-3/4 a bushel. Soybeans firmed in early moves on news that China and the United States agreed to hold high-level talks in early October, raising hopes for a thaw in their trade dispute. China is the world's top soy importer. But CBOT soy futures turned down as brokers shifted their focus to ample U.S. supplies and prospects for large harvests in South America, which has ramped up exports to China during the trade war. Commodity brokerage INTL FCStone late on Wednesday raised its forecast of the U.S. 2019 soybean yield to 48.3 bushels per acre, from its Aug. 1 figure of 47.2. The firm put U.S. soybean production at 3.661 billion bushels, down from 3.743 billion previously, reflecting a smaller harvested acreage figure from last month. On Thursday, INTL FCStone projected Brazil's 2019/20 soybean crop at 121.41 million tonnes, up from 115.07 million in 2018/19. The U.S. Department of Agriculture has projected Brazil's 2019/20 crop at 123 million tonnes.

"Without an agreement with China to buy our beans, they (China) are free to buy South American soybeans. And that is going to hurt our export demand," said Brian Hoops, president of broker Midwest Market Solutions. Separately, China's customs agency said it had allowed imports of soymeal and other oilseed products from Russia, which so far has been a minor soybean producer. "We continue to lose market share. And this trade deal between us and China is nowhere close to happening," said Tom Fritz, a partner with EFG Group in Chicago. CBOT wheat futures climbed, rallying from three-month lows set this week, while K.C. hard red winter wheat futures and Minneapolis Grain Exchange spring wheat futures recovered from 14- and 10-year lows, respectively. Traders cited wheat prospects in Australia, which is struggling with a third straight year of drought. "There are concerns about the crop in Australia being hurt, and that could show up in the USDA report next week," said Hoops, referring to the USDA's monthly supply/demand report due on Sept. 12. Corn futures inched higher as the strength in wheat helped lift corn from life-of-contract lows set a day earlier. Traders shrugged off bearish weekly ethanol data. The U.S. Energy Information Administration said weekly U.S. output of the corn-based biofuel fell to 1.01 million barrels per day, the lowest since April, while stocks rose to 23.8 million barrels.

CBOT settlement prices:

Net Pct Volume

Last change change

CBOT wheat WZ9 466.25 5.50 1.2 44185CBOT corn CZ9 358.75 0.25 0.1 129413CBOT soybeans SX9 861.50 -14.00 -1.6 108785CBOT soymeal SMZ9 294.50 -4.00 -1.3 46400CBOT soyoil BOZ9 28.64 -0.35 -1.2 71389

NOTE: CBOT December wheat and corn and November soybeans shown in cents per bushel, December soymeal in dollars per short ton and December soyoil in cents per lb.

(Reporting by Julie Ingwersen; Additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris; Editing