|11 December, 2019

Soybeans tick lower on China demand doubts

U.S. tariff deadline, swine fever effects weigh on market

PARIS/SINGAPORE- Chicago soybean futures ticked lower on Wednesday, breaking a six-session run of gains, as concerns over Chinese demand and expectations of a record Brazilian crop weighed on the market.

Wheat futures edged lower as traders revised U.S. stocks by the U.S. Department of Agriculture (USDA) downwards against large global supplies that maintained strong export competition.

Corn also inched down as the feed grain market saw few changes in the USDA's monthly crop forecasts issued on Tuesday.

"Grain markets are lower on demand concerns," brokerage Allendale said.

The most-active soybean contract on the Chicago Board of Trade Sv1 was down 0.2% at $8.99-1/2 a bushel by 1208 GMT.

Soybeans had risen in each of the previous six sessions, recovering from a near three-month low struck at the start of last week, encouraged by signs of progress in trade negotiations between Beijing and Washington. 

However, an approaching Dec. 15 deadline for a new round of U.S. tariffs on Chinese goods fuelled renewed caution on financial markets on Wednesday. 

The U.S.-China trade dispute has already disrupted flows of soybeans and future demand for the oilseed could also be curbed by the massive outbreak of African swine fever in China.

"Soybeans are coming off a bit. Even if a trade deal is reached between Washington and Beijing, Chinese demand for beans in the near term will be impacted by the swine fever," said Phin Ziebell, agribusiness economist at National Australia Bank.

Analysts and traders expect Chinese pork output to continue to fall next year due to the impact of swine fever, which should curb demand for soy-based animal feed. 

Soybean prices were also being capped by expectations of a record harvest in Brazil in the coming months.

The USDA, in its monthly supply-demand report on Tuesday, kept its forecast for Brazil's 2019-2020 soybean crop at 123 million tonnes, close to an average of 122.7 million in a Reuters survey of 16 market analysts. 

CBOT wheat lost 0.6% to $5.20-3/4 a bushel. Corn eased 0.4% to $3.75-1/2 a bushel.

Wheat drew support on Tuesday from the USDA's projection that U.S. supplies of wheat will fall to a five-year low, supported by increased export demand. 

However, the international market continued to see strong competition from European and Black Sea wheat origins.

There was no U.S. wheat offered in a snap tender by Egypt's state grain buyer, which bought 355,000 tonnes of Russian, Romanian, Ukrainian and French wheat. 

(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; editing by Uttaresh.V and David Evans) ((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters Messaging: gus.trompiz.thomsonreuters.com@reuters.net))

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