Chicago soybean and wheat futures fell sharply on Thursday, retreating from recent multi-month highs as traders reassessed the pace of Chinese purchases following the U.S.-China trade truce. Corn prices also eased, pressured by the final stages of the U.S. harvest and abundant supplies from South America.
The most-active January soybean contract on the Chicago Board of Trade ended down 26-3/4 cents at $11.07-1/2 per bushel, retreating from Wednesday’s 16-month peak of $11.37. Wheat futures dropped 19-1/4 cents to $5.35-1/2 per bushel, while corn eased 6-1/2 cents to $4.28-3/4.
Markets had rallied on Wednesday after news that China suspended retaliatory tariffs on U.S. imports, including farm goods, but shipments of U.S. soybeans still face a 13 per cent tariff. Optimism quickly faded as only limited purchases were confirmed, with Reuters reporting that China booked just two cargoes of U.S. wheat, far below earlier speculation of several hundred thousand tons.
“The market is moving with the ebb and flow of emotions regarding China,” said Arlan Suderman, chief commodities economist at StoneX. Traders were also waiting for details from a soybean procurement signing ceremony in Shanghai, which provided little clarity on immediate U.S. sales.
U.S. officials have indicated that the trade truce includes a Chinese commitment to purchase 12 million metric tons of soybeans over November and December. While the prospect of Chinese demand had recently supported wheat prices, global competition from Russia and the Southern Hemisphere, including Argentina and Australia, continues to exert downward pressure.
Attention is now turning to the upcoming November supply and demand report from the U.S. Department of Agriculture, the first official outlook since the October report was skipped due to the government shutdown. This report is expected to provide further guidance on crop yields and export trends.
