Grain futures mixed, soybeans touch two-week low amid speculation China may cancel more cargoes

Grain futures were mixed on Wednesday, soybeans fell a third day amid speculation the recent price rally may curb demand and China, the world largest importer of the grain may cancel more cargoes. Meanwhile, corn advanced, while wheat touched the strongest level in more than four months.

On the Chicago Board of Trade, soybeans futures for settlement in May, fell by 2.07% to trade at $13.8313 per bushel by 15:40 GMT. Futures touched a session high at $14.0688 per bushel, while day’s low was hit at $13.6575 per bushel, the weakest level since February 24. On March 7th, prices touched $14.5962 per bushel, the strongest since July 24th.

The grain settled last week 3.2% higher, after adding 3.1% in the previous 5-day period. However, the oilseed has lost 8.5% in 2013.

China has rejected 245 000 metric tons of US soybeans for delivery by August 31st, data by the US Department of Agriculture showed last week. Data also showed that as of the period ended February 27th, China imported 25.5 million metric tons of US soybeans since September 1st, nearly 70% of all shipments by the country. The US is the second largest exporter of soybeans in the world, after Brazil.

There were also growing speculations that China may have rejected more than 500 000 tons of Brazils soybeans, which further pressured prices.

“When you have beans at $14 a bushel, it is very hard to continue to be bullish on it,” Ole Houe, director of advisory services at Ikon Commodities Pty Ltd., said in a Bloomberg phone interview from Sydney. “The quantity of cancellations is rising by the day and that’s got everybody running scared off beans.”

Corn edges higher

On the Chicago Board of Trade, corn futures for May delivery rose by 0.36% to trade at $4.8412 a bushel by 15:37 GMT. Futures hit a session high at $4.8612 per bushel, while day’s low was touched at $4.7662 per bushel. On March 7th, corn futures touched $5.0238 per bushel, the strongest since August 27 and capped a 5.3% weekly gain, the biggest advance since the period ended May 31.

Corn has surged 14% this year after the escalating tension between Ukraine and the Russian Federation threatened to disrupt shipments from the Black Sea region. The grain plunged nearly 40% in 2013, the steepest annual drop on record and the worst annual performance since at least 1959.

DTN.com reported on March 12th that soil moisture for second crop corn and late-filling early soybeans and corn in central Brazil is adequate to surplus at the moment. During the week, rainfall is expected to increase somewhat, favoring late-filling crops, but harming early harvests and early maturing crops.

Meanwhile, the website reported that conditions in central Argentina continue to be mostly favorable for filling and maturing corn and soybeans at this time. Scattered thundershowers are expected later this week, recharging soil moisture, but also being unfavorable for early-maturing crops.

Wheat touches 4-1/2-month high

On the Chicago Board of Trade, wheat futures for settlement in May surged by 2.75% to trade at $6.7713 per bushel by 15:42 GMT. Prices touched a session high of $6.7888 per bushel, the strongest since October 30, while day’s bottom was touched at $6.5212 a bushel.

Wheat settled 8.2% up in February, after plunging 8.3% in January and 9.5% in December, on expectations for a record global output of 712.7 million tons.

According to data by the International Grains Council (IGC), Ukraine will be the sixth-largest global wheat exporter, as it is forecast to ship 9.5 million metric tons of the grain in the 2013-14 season through June, up from 7.1 million tons a year ago.

DTN’s March 12th forecast called for below-normal temperatures over the Midwest during the next 7-to-10 days, hindering the soil warming for spring field work, with possible new round of snow in the northern and eastern areas. According to the website, temperatures won’t be low enough to harm the soft red winter wheat crop.

Meanwhile, limited rainfall is expected across the dry areas of the southwestern Plains during the next 10 days. Concern over crops started to increase as the spring season is nearing and for now, there are no signs of improving amounts of rainfall. The website reported that the southeast areas may experience shower threats, which will help maintain beneficial conditions for wheat in these areas.