Chicago soybeans drop after US biofuels proposal is a disappointment; corn pulls away
Chicago soybean futures declined for the second consecutive session on Thursday. This was due to a decline in soy oil prices after a disappointing U.S. proposal regarding biofuel blends and continued low demand from China.
The most active soybean contract traded on the Chicago Board of Trade lost 0.36%, to $10.40 a bushel.
After the U.S. Environmental Protection Agency's (EPA) proposal on Tuesday failed to explain how the small refinery exemption program would reallocate biofuel blending requirements, there was pressure in this market.
Analysts have stated that the agency's proposal - which includes a period of 45 days for comments - shows that EPA has not finalised its biofuel regulations, putting biomass diesel production in limbo.
As the U.S. enters the harvest season in the fall, farmers are becoming increasingly worried about low crop prices, and a potential trade war between the U.S. and China, the top buyer, who has not yet booked any U.S. soy bean shipments for the new crop.
Republican lawmakers from farm states are calling on President Donald Trump to provide economic assistance for farmers before the end of the year.
The Financial Times reported on Thursday that, citing Agriculture Secretary Brooke Rollins as a source, the Trump administration was preparing plans to use tariff revenues to fund a support program for U.S. Farmers.
In the face of seasonal harvest pressure, corn fell 0.23% to $4.25-3/4 per bushel. The U.S. Department of Agriculture reported this week that 7 percent of corn was harvested by Sunday.
Wheat prices rose by 0.05%, to $5.28-1/2 per bushel. Competitive pricing supported brisk demand for exports, despite the global surplus of wheat.
Analysts expect the USDA to release its weekly export report on Wednesday. They estimate that U.S. corn sales for the week ending September 11 will be between 500,000 and 1,900,000 tons. Soybeans are expected to be in the range of 400,000-1,000,000 tons. Wheat is expected to reach 300,000-650,000 tonnes. Reporting by Ella Cao, Lewis Jackson and Harikrishnan Nair; Editing by Eileen Soreng & Harikrishnan Nair
(source: Reuters)
