Soybeans Tick Up, China Demand Concerns Curb Gains
Chicago soybean futures edged higher on Wednesday, as the market took a breather after dropping to a more than one-month low earlier this week, although gains were capped by concerns over China's demand after the coronavirus outbreak.
Corn rose for a second session, buoyed by strong demand for U.S. cargoes, while wheat prices gained after finishing lower the past three days.
"There is uncertainty about the virus, it is tough to react given the information we have," said Phin Ziebell, agribusiness economist at National Australia Bank. "We have to wait and see what impact it will have on demand. It is bit quiet today after losses."
The most-active Chicago Board of Trade (CBOT) soybean contract was up 0.7% at $9.01 a bushel by 0327 GMT, having dropped to its lowest since Dec. 12 at $8.88-1/4 a bushel on Monday.
Corn gained 0.3% to $3.87-1/2 a bushel and wheat rose 0.5% to $5.72-1/2 a bushel.
Concerns about the spread of the virus in China continued to weigh on commodity markets as death toll from the outbreak rose to 132 on Wednesday with nearly 1,500 new cases, heaping pressure on Beijing to control the disease.
The market is awaiting signs of a pick-up in Chinese demand promised when Washington and Beijing signed the Phase 1 trade deal on Jan. 15. China is by far the world's biggest soybean importer.
U.S. soybean exporters are likely to face stiff competition from Brazil, which has just started harvesting a bumper crop.
Brazilian farmers have harvested 4.2% of their planted area through Jan. 23, less than the 13% seen in the same year-ago period because of planting delays, AgRural said in a statement on Monday.
The corn market is being underpinned by strong demand for U.S. supplies.
Private exporters reported the sale of 124,335 tonnes of U.S. corn to Mexico for delivery in the 2019/20 marketing year, the U.S. Agriculture Department said. It was the sixth flash sale of corn since Jan. 23.
Commodity funds were net buyers of CBOT corn futures contracts on Tuesday, traders said. They were net sellers of soybeans, wheat, soyoil and soymeal futures.