Chicago | Reuters — Chicago soybean futures sank for a second consecutive session on Wednesday as the prospect of rain in Brazil eased worries about drought damaging harvest prospects in the world’s top exporter.
Corn and wheat futures also traded lower.
The market fell after forecasts showed much-needed rain is likely coming in the week ahead to central and northern Brazil, where hot, dry conditions have caused concern, analysts said.
“Well, welcome to the wonderful world of weather,” said Tom Fritz, partner with brokerage EFG Group in Chicago. “We’re trading the forecast for next week, which has temperatures moderating and bringing back some normal moisture.”
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The sell-off came despite the U.S. Department of Agriculture confirming sales of 125,000 metric tons of U.S. new-crop soybeans to unknown destinations, given that delivery for the crop is far off in the 2024/25 marketing year that begins Sept. 1, 2024.
Traders monitored headlines from Argentina, where the peso dropped more than 50 per cent as markets watched the first details of new President Javier Milei’s plans to steer the beleaguered economy back on track.
Milei will seek to raise export taxes to 15 per cent on some grains, though that would not impact tariffs on soy, an industry source said. Argentina is one of the world’s top exporters of processed soy oil and meal, the No. 3 for corn and an important wheat producer.
CBOT corn Cv1 fell 5-3/4 cents to $4.79-1/2 a bushel, its lowest close since Nov. 29. Wheat Wv1 slid 3.2 per cent to $6.05-1/4 a bushel after rallying to a four-month high last week on U.S. sales to China.
Global wheat demand from places like Algeria and Tunisia helped boost futures on Tuesday, but without much new demand on Wednesday, wheat lost those gains.
“The bull market needs to be fed every day,” Fritz said.
–Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.
