GRAINS-Chicago soybeans drop in choppy trade, wheat up on China purchase
Chicago soybean futures fell on Tuesday, at one point nearing their lowest levels since December of 2021, under pressure from a stronger dollar, improving signs for the U.S. harvest and a brisk start to planting in Brazil.
The drop in soybean prices coincided with a rise in the U.S. dollar .DXY, which climbed to a three-month high against the Brazilian real BRL=.
“That is impacting our ability to remain competitive in the markets as we see South America put their new crop into the ground at this point,” said Mike Zuzolo, president of Global Commodity Analytics in Atchison, Kansas.
Soybeans were already under pressure from a report on Monday that farmers in Brazil, the world’s top soybean producer, were planting their new crop at the fastest pace on record for the period.
U.S. Department of Agriculture (USDA) data on Monday that revealed the current soybean harvest was showing little indication of damage from a hot, dry summer across the American farm belt also weighed on prices. The weekly report pegged the harvest at 23% complete, two percentage points behind expectations.
“Slower harvests tend to make me think it’s taking longer to get into the field and get out of the field,” Zuzolo said. “Why? Because the yields are there, and if not better than expected by the trade,” he said.
Chicago wheat futures Wv1 rose almost 0.7% to settle at $5.68-1/2 a bushel, extending gains from Monday on bargain-buying after prices fell 6% to a three-year low on Friday.
U.S. wheat prices have recently been weighed down by abundant Russian supplies and a report of a larger-than-expected U.S. harvest.
The low prices appeared to have lured a rare Chinese purchase of 220,000 metric tons of U.S. soft red winter wheat, according to the USDA. It marked the first time China had purchased that particular class of wheat from the U.S. since July 2021.
CBOT corn futures Cv1 ticked lower, falling 1-1/4 cents to settle at $4.87-1/2 a bushel and finding support above the contract’s 40-day moving average.
(Reporting by Zachary Goelman in New York City; Editing by Paul Simao)
((zach.goelman@reuters.com; 646-329-4133; on Bluesky @zgoelman.bsky.social))
