BEIJING: Chicago soy futures reversed gains on Monday as a stronger dollar and expectations of a large South American harvest weighed, although concerns about China’s removal of export incentives for used cooking oil (UCO) kept a floor under prices.
Corn steadied while wheat futures traded higher. The most-active soybean contract on the Chicago Board of Trade (CBOT) was down 0.3% at $9.95 a bushel, as of 0417 GMT. The dollar was looking to extend its bull run as lofty Treasury yields and a more restrained outlook for US rate cuts burnished its attractiveness.
“Soybeans is still caught in trying to weigh up what a Trump presidency may mean for imports to China,” said Ole Houe, director of advisory services at IKON Commodities in Sydney.
“The global balance sheet is still heavy and some of the latest strength has been driven by buyers trying to get ahead of any changes in China.
The latest fall overnight is just another sign of how precarious any rallies are likely to be,” he said. Soybean rallied in the previous session after China’s finance ministry said on Friday that it would reduce or cancel export tax rebates for some refined oil products including used cooking oil, or UCO, which may curtail imports into the United States.
US biofuels makers use imported UCO as a low-cost feedstock instead of domestically produced soyoil. Expectations for a large harvest in South America amid good weather has also capped soybean and corn prices with the market factoring in uncertainties with potential US policy shifts under Trump.
The US soybean crush surged to an all-time monthly high in October, while soyoil stocks edged up from a near-decade low in the prior month, according to National Oilseed Processors Association (NOPA) data released on Friday.
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