Soybeans fell for a second day on speculation that importers in China, the world’s biggest buyer of the oilseed, will cancel more cargoes as crush margins near break-even are prompting banks to withhold financing.
Chinese soybean importers may default on as much as 2 million metric tons of shipments, according to the U.S. Soybean Export Council’s Beijing office. Buyers defaulted on at least 500,000 metric tons of U.S. and Brazilian soybeans due to negative crush margins and difficulty getting credit, Reuters reported yesterday, citing two people it didn’t identify.
"The news of China backing away from several cargoes of soybeans due to a line of credit has pressured prices," Paul Georgy, the president of Allendale Inc., wrote in a market comment. Traders will watch the U.S. Department of Agriculture export announcements "very closely" today, he said.
Soybeans for May delivery fell 0.3 percent to $14.7725 a bushel on the Chicago Board of Trade by 5:20 a.m. local time, trimming this week’s advance to 0.3 percent.
Crushing soybeans in China became unprofitable in March and was near break-even today, according to data compiled by Shanghai JC Intelligence Co. That’s made banks withhold letters of credit to some purchasers and may cut monthly imports to about 5.5 million tons in June, July and August, said Zhang Xiaoping, the soybean council’s chief representative in China.
Wheat for July delivery was unchanged at $6.70 a bushel in Chicago after earlier dropping as much as 0.6 percent, with prices down 1 percent this week. Milling wheat for November delivery traded on NYSE Liffe in Paris slipped 0.6 percent to 199 euros ($276.47) a metric ton.
Rain this week eased dryness in parts of South Australia and Victoria, and moisture is adequate in northern New South Wales and Queensland for wheat germination as farmers being planting, according to MDA Information Systems LLC.
Showers are boosting moisture in central and northeast Ukraine and further improvements are expected in west-central and southwest regions this weekend, the Gaithersburg, Maryland- based forecaster said in a report dated yesterday.
Corn for July delivery added 0.5 percent to $5.10 a bushel, set to advance 0.5 percent this week.
Ukraine’s corn harvest will decline 18 percent this year to 23.3 million tons as farmers plant less and reduce use of inputs, Paris-based farm adviser Agritel said yesterday.