SINGAPORE — Chicago soybeans ticked higher on Friday, although the market stayed on track for a third weekly decline, weighed down by slowing purchases from top importer China and expectations of record production in Brazil.
Wheat prices rose on concerns over output in Russia and Ukraine, although the market is poised for its first drop in three weeks.
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“Chinese demand for soybeans is slow and there are estimates of a big crop in Brazil, although it is bit early as the crop has not been planted yet,” said a Sydney-based analyst.
The most-active soybean contract on the Chicago Board of Trade (CBOT) was up 0.1% at $13.59-1/2 a bushel, as of 0244 GMT, bringing the losses in the past three weeks to more than 6%.
Wheat is down almost 4% this week, while corn slid around half-a-percent in the same period.
China’s soybean imports are likely to drop to their lowest in more than two years this month, adding to tight supplies of the key animal feed ingredient soymeal and exacerbating the problems of the country’s hog feed manufacturers.
Soybean arrivals in China, the world’s biggest importer, are estimated to be around or slightly below 5 million tonnes in October, according to two traders and Ole Houe, director of advisory services at agriculture brokerage IKON Commodities in Sydney.
Imports of 5 million would be the lowest since March 2020.
The arrival of rains in September allowed for a promising start to Brazil’s 2022/2023 soybean season, with farmers poised to reap a record 150.62 million tonnes despite the drought risks associated with the La Niña weather phenomenon in the southern part of the country.
U.S. soybean export sales totalled 777,100 tonnes in the week ended Sept. 29, down 23% from a week earlier, the U.S. Department of Agriculture (USDA) said on Thursday.
Corn export sales of 227,000 tonnes were down 56% from a week earlier and below the low end of market expectations.
Typically, overseas demand for U.S. agricultural products surges during harvest but low water on southern sections of the Mississippi River halted most shipping traffic, sending prices for barges soaring.
Traders in the wheat market are closely watching planting conditions in Russia and Ukraine where a prolonged war between the two nations has already reduced exports.
Ukraine’s winter grain sowing area for the 2023 harvest is unlikely to exceed 2 million hectares and the harvest could fall by at least 50%, the head of a large Ukrainian agriculture company said on Thursday.
Low level of moisture reserves in soil in Russia’s southern breadbasket poses risks for the 2023 grain crop of the world’s largest wheat exporter, Roman Nekrasov, an agriculture ministry official, said on Thursday.
Commodity funds were net sellers of CBOT corn, wheat, soybean and soymeal futures contracts on Thursday, traders said. They were net buyers of soyoil futures. (Reporting by Naveen Thukral; Editing by Sherry Jacob-Phillips and Savio D’Souza)