US soyabean futures dropped 2.1 percent on Wednesday on worries about waning demand from China, the world's top buyer of the oilseed. Traders said there was talk that China had backed out of previously agreed purchases of both US and Brazilian soya supplies, which could leave a glut of soyabeans on the market. There was no confirmation of any cancellations.
"Demand has clearly weakened and this has given rise to talk of Chinese cancellations," said Sterling Smith, Citigroup market strategist. The weakness in soyabeans forced investors to back out of some long soyabean/short wheat spreads they have built up in recent months, contributing to a 3 percent gain in wheat prices. Chicago Board of Trade soft red winter wheat hit its highest in more than four months on Wednesday morning. The wheat market received additional support from uncertainty about if the political upheaval in Ukraine will disrupt shipments from that key exporter.
At 10:50 am CDT (1550 GMT), CBOT May soyabeans were 29-1/2 cents lower at $13.83-1/2 a bushel. Prices fell through key technical support at the 20-day moving average and the front-month contract hit its lowest since February 21. Soyabeans have fallen for three consecutive days, shedding 5.3 percent, following the release of worrisome economic data from China that raised questions about its appetite for soyabeans. Market watchers had long expected that China would renege on some US purchase agreements as cheaper supplies from Brazil and Argentina arrived at export ports following harvest.
CBOT May wheat, which surged through its 200-day moving average early in the session, was 19-1/2 cents higher at $6.78-1/2 a bushel. Corn prices remained supported by concerns that plantings could be delayed in the US Midwest due to frozen ground following the frigid winter. CBOT corn for May delivery was up 1-3/4 cents at $4.85 a bushel.