Soybeans dip after Chinese demand helps push prices to 11-week high

Chicago soybean futures dipped on Tuesday after large U.S. bean sales to China and fears that a heat wave in top producer Brazil may be damaging crops pushed prices to their highest since August in the previous session.

Corn and wheat futures also fell.

The most-active soybean contract on the Chicago Board of Trade (CBOT) was down 0.4% at $13.76-3/4 a bushel by 0155 GMT after rising to $13.86 on Monday, the highest since Aug. 31.

CBOT corn slipped 0.3% to $4.75-3/4 a bushel and wheat fell 0.1% to $5.78-1/2 a bushel.

Consultants AgRural lowered their forecast for Brazil’s 2023/24 soybean crop by 1.1 million metric tons to 163.5 million tons due to irregular rainfall and heat in top grain producing state Mato Grosso.

AgRural said further downgrades were possible before the end of this month. The northern two-thirds of Brazil are forecast to see temperatures near 100 degrees Fahrenheit (38 degrees C) in the coming days.

Meanwhile, U.S. exporters sold 204,000 tonnes of soybeans to China for 2023/2024 delivery, the U.S. Department of Agriculture said — the latest in a string of sales ahead of a meeting between Joe Biden and Xi Jinping in San Francisco on Wednesday.

Higher demand for U.S. beans has helped push Chicago prices up 10% from a 22-month low in October. CBOT December soymeal futures have also surged, hitting a contract high on Monday.

Analysts estimate that the U.S. soybean harvest is 96% complete.

In corn markets, the USDA said U.S. exporters had sold 143,637 metric tons of corn to Mexico for 2023/2024 delivery, helping lift prices from Monday’s three-year low of $4.61 a bushel.

Record breaking U.S. and Brazilian harvests have boosted corn supply, pressuring prices.

In Argentina, the government raised the price of bioethanol made from sugar cane or corn and biodiesel for domestic use.

Moving to wheat, the USDA is expected to show steady U.S. winter wheat condition ratings with the crop off to its best start in four years, according to analysts polled by Reuters.

Russian export prices rose for a second week, with 12.5% protein Russian wheat for free-on-board delivery in late December increasing to $230 a metric ton last week from $226, the IKAR agriculture consultancy said.

Wheat prices remain near September’s three-year low of $5.40 a bushel thanks to a deluge of cheap wheat from Russia, which has seen a second consecutive bumper harvest.

Traders were watching for the impact of heavy rains on crops in northern France.

Large speculators raised their net short position in CBOT corn in the week to Nov. 7 while trimming their net short in wheat and increasing their net long position in soybeans, regulatory data released on Monday showed.

Commodity funds were net buyers of corn, wheat, soybean and soymeal futures contracts on Monday, according to traders.

Tags: Brazil, estimate, soybeans, wheat, U.S., futures, Argentina, China, harvest, corn