Chicago soybeans retreat from near 10-month highs as soyoil slumps; wheat rises
BEIJING: Chicago soybean futures slipped from near 10-month highs on Thursday, weighed down by a sharp drop in soyoil as falling crude oil prices and mounting uncertainty over the U.S. biofuel policy pressured the market.
Soyoil futures dropped 5.18% to 49.61 cents per pound, the steepest daily decline since June 2023, partly due to weaker crude oil prices following a surprise U.S. inventory build and renewed hopes for a U.S.-Iran nuclear deal.
Soybeans slipped 0.93% to $10.68 per bushel, snapping a five-session winning streak. The market had drawn support from a Monday proposal to extend the biofuel tax credit (45Z), which underpins demand for soyoil in renewable diesel production.
Shifting expectations about U.S. biodiesel policy have disrupted the soyoil market, with rumours of lower-than-expected target for biomass diesel mandates and delays in biofuel tax credit rule-making adding to market uncertainty.
Optimism over a temporary truce in the U.S.-China trade war lent some support to soybean prices, but traders and analystswarned of uncertainty ahead of the U.S. marketing season.
On Wednesday, agribusiness consultancy AgResource warned U.S. soybean exports may drop 20% and that prices will plunge if the U.S. and China fail to resolve their trade dispute.
Soybeans, corn up on US-China trade optimism; wheat flat
Corn rose 0.34% to $4.47 per bushel, supported by concerns about potential unfavourable weather during the U.S. summer.
In rival supplier Brazil, 2024-25 corn output is estimated to be about 125 million metric tons, according to the Brazilian Association of Corn and Sorghum Producers.
Wheat rose 0.57% to $5.27-6/8 a bushel, stabilizing after hitting its lowest in nearly five years on Wednesday.
'Wheat is just stabilising after a big run-up overnight, said Ole Houe, director of advisory services at IKON Commodities in Sydney, adding that prices will likely strengthen further due to dryness concerns in hard red winter wheat growing areas.
Traders are awaiting the U.S. Department of Agriculture's weekly export sales report, due later in the day.
Commodity funds were net buyers of corn, wheat, soybean and soyoil futures contracts on Wednesday, traders said. They were net sellers of soymeal futures, traders said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
3 hours ago
- Business Recorder
Chinese and Hong Kong stocks gain ahead of Sino-US trade talks
Hong Kong: Chinese and Hong Kong stocks edged higher on Monday, led by the rare earth and technology sectors, as investors awaited high-level U.S.-China trade negotiations in London. Investors were cautiously positive as the world's two largest economies seek to defuse their trade dispute, with China grappling with slow exports and deflation while the U.S. faces eroding confidence in its assets and economy. U.S. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer will meet China's Vice Premier He Lifeng in the first meeting under the two countries' economic and trade consultation mechanism. China's blue-chip CSI300 Index closed up 0.3% and the Shanghai Composite Index ended 0.4% higher. Hong Kong's benchmark Hang Seng advanced 1.6% to the highest level since March 21. The offshore yuan struggled for direction and was last traded at 7.1852 per dollar. Monday's meeting follows a rare leader-to-leader call between Chinese leader Xi Jinping and U.S. President Donald Trump on Thursday after tensions flared up again, with both sides accusing the other of violating a deal agreed last month. China, HK stocks close down as US-China call offers no clear progress on trade The two sides agreed a 90-day pause and a sharp reduction in tariffs after talks in Geneva in early May, which left U.S. tariffs on Chinese goods at 30% from May 14 to August 12 and Chinese duties on U.S. imports at 10%. That brought temporary relief from a trade war that could bring $600 billion in two-way trade to a standstill, disrupting supply chains and impacting the global economy. 'We think there could be some favourable outcomes from the meeting as Trump has hinted some positive signs,' analysts at China Securities said in a note, adding that any progress would offer markets some relief. Leading onshore markets higher on Monday, the strategically-important rare earths sector - expected to be a key focus of the talks - advanced 2.4% onshore in its best single-day performance in over a month. Technology shares led Hong Kong markets higher, with the Hang Seng Tech Index rising 2.8% to a one-month high. The subindex has gained over 20% since its April low, entering a technical bull market. Chinese stocks have been struggling for direction since April 2, when Trump announced sweeping 'reciprocal' tariffs that threatened to upend the global trade order. The CSI300 Index onshore has barely budged from the April 2 level, and the Hang Seng has gained around 4% during the period, both lagging the recovery among major global markets.
Business Recorder
6 hours ago
- Business Recorder
US, China seek to extend trade truce with London talks
LONDON: The United States and China are to sit down at the negotiating table in London on Monday to attempt to preserve a fragile truce on trade, despite simmering tensions. Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer are leading the US delegation, President Donald Trump announced on Friday. Chinese Vice Premier He Lifeng – who led Beijing's negotiating team at previous talks with the United States last month in Geneva – would also head the team in London, China's foreign ministry announced at the weekend. 'The meeting should go very well,' Trump said on his Truth Social platform. His press secretary, Karoline Leavitt, told Fox News on Sunday: 'We want China and the United States to continue moving forward with the agreement that was struck in Geneva.' While the UK government reiterated that it was not involved in the content of the discussions in any way, a spokesperson said: 'We are a nation that champions free trade.' UK authorities 'have always been clear that a trade war is in nobody's interests, so we welcome these talks,' the spokesperson added. Rare earths The talks in London come just a few days after Trump and Chinese President Xi Jinping finally held their first publicly announced telephone talks since the Republican returned to the White House. Trump said the call, which took place on Thursday, had reached a 'very positive conclusion.' Trump signals fresh trade tensions with China Xi was quoted by state-run news agency Xinhua as saying that 'correcting the course of the big ship of Sino-US relations requires us to steer well and set the direction'. The call came after tensions between the world's two biggest economies soared, with Trump accusing Beijing of violating a tariff de-escalation deal reached in Geneva in mid-May. 'We need China to comply with their side of the deal. And so that's what the trade team will be discussing tomorrow,' Leavitt said Sunday. A key issue in the negotiations will be Beijing's shipments of rare earths – crucial to a range of goods including electric vehicle batteries and which have been a bone of contention for some time. 'Rare earth shipments from China to the US have slowed since President Trump's 'Liberation Day' tariffs in April,' said Kathleen Brooks, research director at trading group XTB. 'The US wants these shipments to be reinstated, while China wants the US to rethink immigration curbs on students, restrictions on access to advanced technology including microchips, and to make it easier for Chinese tech providers to access US consumers,' she added. In April, Trump introduced sweeping worldwide tariffs that targeted China most heavily. At one point the United States hit China with additional levies of 145 percent on its goods as both sides engaged in tit-for-tat escalation. China's countermeasures on US goods reached 125 percent. Then in Switzerland, after two days of talks, the two sides agreed to slash their staggeringly high tariffs for 90 days. But differences have persisted, including over China's restrictions on exporting rare earth minerals. The impact was reflected in the latest official export data released Monday in Beijing. Exports to the United States fell 12.7 percent on month in May, with China shipping $28.8 billion worth in goods last month. China urges US to correct 'wrongdoings' on AI chip curb This is down from $33 billion in April, according to Beijing's General Administration of Customs. There is also huge uncertainty around the outcome of other trade disputes. 'Green channel' Throughout its talks with Washington, China has also launched discussions with other trading partners – including Japan and South Korea – in a bid to build a united front to counter Trump's tariffs. On Thursday, Beijing turned to Canada, with the two sides agreeing to regularise their channels of communication after a period of strained ties. Canadian Prime Minister Mark Carney and Chinese Premier Li Qiang also discussed trade and the fentanyl crisis, Ottawa said. Beijing has also proposed establishing a 'green channel' to ease the export of rare earths to the European Union, and the fast-tracking approval of some export licenses. China is expected to host a summit with the EU in July, marking 50 years since Beijing and Brussels established diplomatic ties.
Business Recorder
9 hours ago
- Business Recorder
South Korean shares extend rally on post-election hopes, US-China trade talks
SEOUL: Round-up of South Korean financial markets: South Korean shares rose for a fourth straight session on Monday, hitting a near 11-month high on post-election policy hopes, while investor focus was also on the US-China trade talks. The benchmark KOSPI was up 47.58 points, or 1.69%, at 2,859.63, as of 0123 GMT, touching its highest level since July 17, 2024. US President Donald Trump's top aides will meet with their Chinese counterparts in London later in the day for talks aimed at resolving a trade dispute between the world's two largest economies that has kept global markets on edge. Trump and South Korea's new president Lee Jae-myung agreed to work toward a swift tariff deal in their first phone call since Lee was elected this week, Lee's office said on Friday. Among index heavyweights, chipmaker Samsung Electronics rose 2.03%, while peer SK Hynix gained 2.67%. Battery maker LG Energy Solution slid 2.23%. Hyundai Motor and sister automaker Kia Corp were up 3.96% and 2.90%, respectively. Steelmaker POSCO Holdings added 0.97%, while drugmaker Samsung BioLogics rose 0.39%. Of the total 937 traded issues, 696 shares advanced, while 212 declined. Foreigners were net buyers of shares worth 244.8 billion won ($180.16 million). The won was quoted at 1,363.5 per dollar on the onshore settlement platform, 0.51% lower than its previous close at 1,356.5. In money and debt markets, June futures on three-year treasury bonds lost 0.08 point to 107.18.
