Soybeans at one-week low on Argentine tax cuts; wheat, corn down
SINGAPORE: Chicago soybeans slid for a second straight session on Monday to their lowest in almost one week, as Argentina's decision to lower grain export taxes raised expectations of higher supplies form the South American country.
Wheat fell more than 1%, although the decline was limited by cold weather causing damage to the U.S. winter crop, while corn slid for a second straight session.
"The market is expecting higher exports from Argentina, which is bearish for prices," said one Southeast Asia-based trader. "Prices had earlier rallied on worries over adverse weather, the market is now giving up some of those gains."
The most-active soybean contract on the Chicago Board of Trade (CBOT) fell 1.4% to $10.41-1/4 a bushel by 0231 GMT. Earlier in the session it slid to $10.40 a bushel, the lowest since Jan. 21.
Wheat gave up 1% to $5.38-3/4 a bushel and corn dropped 1.2% to $4.80-3/4 a bushel.
Argentina's unexpected cuts to grains export taxes will likely trigger a surge in shipments from the country, analysts said, while longer-term it could boost production in the South American country, a major supplier of soy, corn and wheat.
Higher supplies of agricultural products from Argentina are likely to boost competition in the global market for rival exporters, including the United States.
Argentina is the world's top exporter of processed soy oil and meal, the No. 3 exporter of corn and a major producer of wheat. Its farmers have faced hot, dry weather in recent weeks that hurt harvest prospects and contributed to rising international corn and soybean prices.
The Buenos Aires Grains Exchange cut estimated yields for soybean and corn crops last week. Light rains forecast over swathes of the country in the coming weeks are not expected to significantly slash dryness.
The drop in wheat prices is being curbed by extreme U.S. weather.
Frigid temperatures this week likely killed as much as 15% of the winter wheat crop in parts of the U.S. Plains and Midwest, the Commodity Weather Group said on Friday, in an ominous sign for U.S. wheat production.
A blast of Arctic air covered much of the United States earlier this week, sending temperatures plunging across key wheat areas that have seen limited snowfall this winter.
In news, China's suspension earlier this month of Brazilian soybean exports from five companies after cargoes did not meet plant health requirements will last two months, a top Brazilian agriculture official told Reuters on Friday.
China suspended imports from the five companies on Jan. 8 and Jan. 14 after cargoes failed to meet Chinese import standards. The five suspended units are part of operations that accounted for over 30% of the more than 73 million metric tons of soybeans that Brazil exported to China in 2024. However, other units of the same companies have not been suspended.
Large speculators raised their net long position in CBOT corn futures in the week to Jan. 21, regulatory data released on Friday showed.
The Commodity Futures Trading Commission's weekly commitments of traders report also showed that noncommercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and cut their net long position in soybeans. (Reporting by Naveen Thukral; Editing by Subhranshu Sahu)
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