U.S. grains: Soybeans fall on Argentina weather

Reuters — U.S. soybean futures fell to a 1-1/2-week low on Wednesday on an improved South American crop weather outlook while corn edged higher on export demand, traders said.

Wheat sagged on ample old-crop supplies and a lack of supportive news.

Chicago Board of Trade March soybean futures settled down 3-1/4 cents at $10.55-1/4 per bushel. March corn ended up three cents at $3.66-1/4 a bushel and March wheat fell 2-1/4 cents at $4.24-1/2 a bushel.

March soybeans fell to $10.50 a bushel in early moves, the contract’s lowest since Jan. 13.

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“In general, with the improvement in South American weather, especially Argentina, and a chance for Paraguay to dry down, we are seeing a little bit of setback in the soybean complex,” said Terry Reilly, a senior analyst with Futures International.

Argentina’s soy belt is recovering from flooding this month. Conditions have been dry this week, but some forecasts called for rains to return in February. The country is the No. 3 global soy producer and the world’s top exporter of soyoil and soymeal.

CBOT soyoil futures fell on news that the U.S. Environmental Protection Agency would delay 30 regulations, including implementation of 2017 biofuels requirements announced in November.

Soyoil is the primary U.S. feedstock for biodiesel fuel, and the delay heightened uncertainty about the prospects for the federal biofuels mandate.

Corn futures ended higher as traders exited long soybean/short corn spreads, and amid demand from exporters and producers of ethanol fuel.

The U.S. Energy Information Administration reported weekly output of corn-based ethanol at 1.05 million barrels per day, down slightly from the prior week’s record-high level. Ethanol stockpiles rose.

“Ethanol production is still running near record, so that is supportive. And we are seeing a little bit of unwinding of soy-corn spreads,” Reilly said.

On the export front, the U.S. Department of Agriculture said private exporters sold 141,224 tonnes of U.S. corn to unknown destinations in the last day, its second corn sales announcement in as many days.

Concerns about prospects for U.S. agricultural trade clouded the outlook for grain markets, given President Donald Trump’s plan to renegotiate the North American Free Trade Agreement with Mexico and Canada and his abandoning of the Trans-Pacific Partnership with Asian countries.

“Trump’s policies seem to be bringing in a lot of uncertainty to the market, which is already struggling with oversupply,” said Rajesh Singla, head of agriculture research at Societe Generale.

Reporting for Reuters by Naveen Thukral in Singapore and Gus Trompiz in Paris.

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