Chicago-area grain futures reversed earlier gains on Thursday, tracking a retreat in crude oil prices that earlier climbed to four-year highs. By 1130 GMT the most-active soybean contract on the Chicago Board of Trade was down 0.6% at $11.90 a bushel after having reached its strongest point in more than six weeks earlier in the session.
Global oil prices eased following an intraday peak above $126 a barrel on Thursday. The earlier strength in crude - driven in the market by unprecedented supply disruption linked to the Iran war - had provided support to the soy complex and corn futures because both soybeans and corn are used as feedstocks for biofuel production.
Corn also trimmed earlier gains, falling 0.7% to $4.74-1/4 a bushel, while remaining close to levels not seen in about two years. Market participants noted that early U.S. planting progress for soybeans and corn has been generally favorable so far, though expected storms in the Midwest could delay seeding in some regions.
Wheat lost 1.5% to $6.53 a bushel, yet prices remain near their highest point in nearly two years as dryness across the U.S. winter wheat belt continued to raise concerns about available supplies.
Separately, policy moves in Asia weighed on near-term sentiment for wheat. Indonesia - one of the world's largest wheat importers - announced tighter import regulations taking effect from May 8. Under the new rules, certain products such as feed wheat that previously could enter the country without restriction will now require government approval for each shipment.
"The regulation could act as a brake on prices: the bureaucratic hurdles will reduce Indonesian demand on the world market, which could lead to an oversupply among major exporting nations and ease upward pressure on prices somewhat," Commerzbank said in a note.
Traders also reported that commodity funds were net sellers of corn, wheat and soymeal on Wednesday.
Prices at 1130 GMT
| Last | Change | Pct Move |
|---|---|---|
| CBOT wheat 643.00 | -10.00 | -1.53 |
| CBOT corn 474.25 | -3.50 | -0.73 |
| CBOT soy 1190.00 | -7.00 | -0.58 |
| Paris wheat 214.00 | -3.25 | -1.50 |
| Paris maize 223.25 | -1.50 | -0.67 |
| Paris rapeseed 596.50 | 0.00 | 0.00 |
| Euro/dlr 1.17 | 0.00 | 0.34 |
Most active contracts listed are wheat, corn and soy in U.S. cents per bushel; Paris futures are quoted in euros per metric ton.