GRAINS-Corn, Soybeans Down Despite China Purchase; Weather Eyed
Category: Weather
(Reuters) – CHICAGO, Aug 1 (Reuters) – U.S. corn and soybean futures fell on Thursday on a more favorable weather outlook for U.S. crops, as traders shrugged off a small new crop soybean sale to China.
Forecasts for cooler weather eased concerns about the prospects for the coming crop. Conditions for the U.S. Midwest predicted below-average temperatures for this time of year, with rains hitting the Southern Plains.
“These 70-80°F (21.1-26.6°C) days are the perfect weather for the corn to mature,” said John Dee, president and owner of Global Weather Monitoring.
Dee cautioned that the late planting season made analysts unsure whether crops were going to pollinate correctly. Some parts of the eastern corn belt will still be experiencing some dryness, he said.
The most active corn futures on the Chicago Board Of Trade were down 3-3/4 cents, or 0.9% at $4.06-1/4 a bushel by 11:43 a.m. (1543 GMT), having closed down 2.6% in the previous session.
Analysts are waiting for the U.S. Department of Agriculture (USDA) to release its revised acreage numbers in a report due out on the 12th of August.
“This report will set the undertone for the condition of the crop,” said Terry Reilly, senior agriculture analyst for Futures International.
The most active wheat futures were down 7-1/2 cents, or 1.5%, at $4.79-3/4 a bushel.
The most active soybean futures were down 7 cents, or .8% at $8.74-1/2- a bushel. Soybeans closed down 1.7% on Wednesday.
The latest round of U.S.-China trade talks wrapped up on Wednesday without any visible signs of progress to resolve the trade war.
The U.S. Department of Agriculture on Thursday confirmed that a private Chinese company bought 68,000 tonnes of soybeans in the week ended July 25, the first soybean purchase since Beijing offered to exempt five crushers from import tariffs imposed more than a year ago as part of the U.S.-China trade dispute.
In its weekly export sales report, the USDA also said China bought 66,800 tonnes of soybeans for 2018/19 delivery, including 62,000 tonnes that had previously been listed as headed for unknown destinations. But China also canceled previous purchases totalling 72,900 tonnes for the current marketing year.
“These new purchases have already been factored into the market,” said Reilly.
Reilly added that China will need to buy a larger quantity of soybeans for the market to react. (Reporting by Barbara Smith in Chicago Additional Reporting by Colin Packham in Sydney and Sybille de La Hamaide in Paris Editing by Emelia Sithole-Matarise and Jonathan Oatis)
