Chicago | Reuters – Chicago wheat futures found their footing on Thursday on short covering but remained near eight-week lows after China cancelled purchases from the United States and as large harvests in Argentina and Australia poured new grain into a well-supplied market, analysts said.
Soybean futures continued the previous day’s fall on long liquidation and continued pressure from ample global supply and questions over Chinese demand.
“Everybody that bought the market is losing money and Chinese demand is not supporting a rally,” said Dan Basse, founder of AgResource. “‘Do you want to take a losing position in the New Year?’ is what fund managers are asking themselves.”
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Corn rose for a second day due to strong U.S. export demand, though pressure from low wheat prices limited gains. Wheat competes with corn in the animal feed market.
The most-active wheat contract on the Chicago Board of Trade settled 1-1/2 cents higher at $5.07-3/4 per bushel, after falling to $5.04 on Wednesday, its lowest since October 23.
CBOT soybeans Sv1 settled 6 cents lower at $10.52-1/4 a bushel, having slipped to a seven-week low of $10.53-1/2 in the previous session. Corn Cv1 settled up 4 cents at $4.44-1/2 per bushel.
Wheat and soybean prices have slumped about 10% from highs last month.
The USDA said on Wednesday that exporters had cancelled sales of 132,000 metric tons of U.S. white wheat to China. The reason for the cancellation was not known, but traders said Argentine wheat was available at lower prices.
Chinese state-owned agribusiness COFCO International said on Saturday it was loading its first bulk commercial shipment of Argentine wheat bound for China, opening a new trade route between the two countries and adding to pressure on Chicago wheat futures.
Progress in peace negotiations to end the war in Ukraine has weighed on wheat prices, but a ceasefire may still be some way off.
-Additional reporting by Peter Hobson in Canberra and Sybille de La Hamaide in Paris.
