Corn, Soybeans Fall As New China Buying Awaited, Wheat Up
Chicago corn and soybeans fell on Tuesday as markets awaited concrete evidence that China has started to buy more U.S. grains and oilseeds again after the initial trade deal between the two countries last week.
Wheat rose on rising prices in rival exporting countries and signs of strong demand.
Chicago Board of Trade most active corn was down 0.4% at $3.87-1/2 a bushel at 1223 GMT, after rising 3.7% on Friday in turn on hopes China will buy more grain from the United States. Chicago markets were closed for a holiday on Monday.
Wheat rose 0.5% to $5.73-1/2 a bushel and soybeans fell 0.4% to $9.25-3/4 a bushel.
China committed to increase purchases of U.S. farm products by $32 billion over two years under the Phase 1 trade deal signed last week following a bitter trade war between the two countries.
But China's pledge to buy U.S. agricultural goods based on 'market conditions' added to doubts about the size and timing of purchases.
"Corn and soybeans are weaker today as markets await the expected Chinese purchases after the signing of the Phase 1 trade deal between the U.S. and China," said Matt Ammermann, commodity risk manager with INTL FCStone.
"Corn markets rose sharply on Friday on the rumours of a few cargos bought by China per TRQ (tariff reduced quota), and today markets will try to validate the facts."
A Singapore-based trader added: "There were rumours in the market on Friday that Chinese buyers were looking to book U.S. cargoes but U.S. grain elevators have yet to confirm any Chinese buying."
"I think the market is waiting for Chinese buying."
Meanwhile, the start of harvesting of an expected big soybean harvest in rival exporter Brazil also weighed on the market.
"The record large Brazilian soybean crop also has a weakening influence on soybean prices until we see evidence of actual new Chinese purchases of U.S. supplies," Ammermann said.
"Wheat is seeing support from strong prices in rival exporters in the Black Sea including Russia and in France," Ammermann said. "French traders continue to deal with the continued impact of the current transport strike."
Export prices of Russian wheat reached their highest level last week since the season began in July due to demand from major customer Egypt and risks related to Russian proposals to introduce an export quota.
Pakistan on Monday approved the import of 300,000 tonnes of wheat.