U.S. grains: Soy falls on cooler weather, China cancellation

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Chicago | Reuters — Chicago soybean futures settled down following a choppy day of trading on Thursday, after hitting the lowest level in more than a week on forecasts for cooler weather and export data showing China had canceled soy purchases for the first time since April.

U.S. Agriculture Department data showed the world’s top soybean importer canceled purchases of 9,853 tonnes of U.S. soy last week as the bilateral trade war remained unresolved.

The August soybean contract on the Chicago Board Of Trade (CBOT) settled down 1-1/4 cents at $8.81-1/4 a bushel at close (all figures US$). Earlier in the session, it touched the lowest since July 9, at $8.96-1/2 a bushel.

Corn settled down 11-1/2 cents, or 2.5 per cent, at $4.24-1/2 a bushel, while wheat settled down 12 cents, or 2.3 per cent at $4.93-1/2 a bushel.

Wheat slid for a fourth consecutive session as freshly harvested grain weighed on markets across the Northern Hemisphere.

Last week, grain markets were underpinned by fears that U.S. crops could suffer from prolonged hot and dry weather, and Midwest rains brought some relief on Thursday.

Corn prices have climbed for the last two weeks and hit a five-year high of $4.64-3/4 a bushel on Monday, on concerns about hot weather following rain-plagued planting delays.

USDA export data also showed Russia and Mexico canceled 171,000 and 32,000 tonnes of soybeans, respectively.

While the reasoning for Mexico’s move was not immediately clear, analysts said China’s need for soybeans had cooled after a fatal pig disease ravaged the world’s largest hog herd.

“It ties into African swine fever,” said Matt Connelly, grains analyst at The Hightower Report. “There are less pigs to feed, which means they are going to need less soybeans altogether.”

Connelly added that U.S.-China trade talks were “sputtering.”

U.S. and Chinese officials will speak on Thursday, potentially paving the way for in-person trade talks to resume, U.S. Treasury Secretary Steven Mnuchin said, as the world’s two largest economies seek to end a year-long trade war.

The grain market also awaits USDA’s acreage report on Aug. 12 for price direction.

Joe Aiello, senior agriculture advisor with Roach Agriculture Marketing, said to expect a “20-30 cent range” in prices until the report is released.

— Reporting for Reuters by Barbara Smith in Chicago; additional reporting by Naveen Thukral.