(Reuters) – Chicago corn futures lost ground on Thursday, giving up some of the last session’s gains on concerns over changes in trade policies under new U.S. President Donald Trump.
Soybeans were little changed after closing lower on Thursday, under pressure from much-needed dry weather in Argentina’s flooded farm-belt. Wheat edged higher but the rise was capped by abundant global supplies.
The Chicago Board of Trade most-active corn contract slid 0.3 percent to $3.65-1/4 a bushel by 0302 GMT, while soybeans were unmoved at $10.55-1/4 a bushel. Wheat gained 0.1 percent to $4.25 a bushel.
President Trump’s plan to renegotiate the North American Free Trade Agreement with Mexico and Canada and his abandonment of the Trans-Pacific Partnership trade deal with Asian countries have raised concerns about the prospects for U.S. agricultural commodities.
“Asian demand could switch. South Korea and Japan might take more corn supplies from South America. Mexico might also shift as there are ample supplies in the world market,” said Kaname Gokon at brokerage Okato Shoji in Tokyo.
There are also domestic demand concerns for U.S. corn and soyoil, with the nation’s Environmental Protection Agency delaying implementation of this year’s biofuels requirements, likely reducing the use of grains and oilseeds to make renewable fuels..
Prices of paper credits used to meet U.S. biofuels standards dropped to their lowest in more than a year on Wednesday, extending the previous day’s slide on news of the governmentfreeze.
The U.S. Energy Information Administration reported weekly output of corn-based ethanol at 1.05 million barrels per day, down slightly from the prior week’s record-high level. Ethanol stockpiles rose.
On the export front, the U.S. Department of Agriculture said private exporters sold 141,224 tonnes of U.S. corn to unknown destinations in the last day, its second corn sales announcement in as many days.
Argentina’s soy belt is recovering from flooding this month.
Conditions have been dry this week, but some forecasts called for more rains in February. Argentina is the No. 3 global soy producer and top exporter of soyoil and soymeal.
The wheat market remained under pressure from plentiful global supplies.
The market’s attention is turned towards a wheat import tender issued by the world’s top buyer Egypt for shipment March 1-10. Exporters from the Black Sea region won most of the Egyptian business last year as U.S. wheat remains uncompetitive.
Commodity funds were net sellers of Chicago Board of Trade soybean and wheat futures on Wednesday and net buyers of corn, traders said.
