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Market sees record Brazil soy crop offsetting Argentina
drought
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Soyoil joins slide in vegetable oil prices
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Wheat, corn firm with weather, Black Sea tensions in focus
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Investors cautious before U.S. inflation data
(Updates with European trading, changes byline/dateline)
By Gus Trompiz and Naveen Thukral
PARIS/SINGAPORE, April 12 (Reuters) - Chicago soybean
futures edged down on Wednesday, giving up some of the last
session's gains, as a bumper harvest in Brazil and a slide in
vegetable oil markets offset support from drought losses to
Argentina's crop.
Wheat and corn rose slightly to recoup losses from Tuesday,
with participants assessing weather conditions and tensions over
a Black Sea export corridor from war-torn Ukraine.
Price movements were limited in keeping with wider financial
markets as investors awaited U.S. inflation data as a gauge of
subsequent interest rate moves by the U.S. Federal Reserve. The most-active soybean contract on the Chicago Board of
Trade (CBOT) was down 0.2% at $14.95 a bushel by 1147 GMT.
Soybean production in Argentina will fall to a 23-year low
and corn production to a five-year low due to drought, the U.S.
Department of Agriculture (USDA) said on Tuesday as it cut
sharply its forecasts for Argentina's crops.
But the USDA increased its outlook for Brazil's soy crop to a new record, while holding its projection for bigger corn output there this season. "A jump in Brazilian production partially offset the sharp drop in Argentine production," commodities research firm Hightower said. CBOT soyoil shed 1.4%, tracking an earlier slide in palm oil in Malaysia amid bearish supply and demand sentiment. CBOT wheat gained 0.6% to $6.77-3/4 a bushel and corn added 0.5% to $6.54-1/4 a bushel.
Traders were monitoring renewed Russian criticism of the
deal allowing Ukraine to export grain from Black Sea ports.
Moscow, which agreed in mid-March to extend the arrangement
for a reduced period until mid-May, said on Wednesday prospects
for the deal were "not so great".
Wheat prices have not reacted significantly to the latest
wrangling over the agreement, partly due to large exports by
Russia.
"However, we fear that the market may be underestimating the
risk of the talks breaking down," Commerzbank analysts said.
"Just how important the seaborne grains corridor has become
for Ukraine is clear from the problems it is having transporting
grains exports by land."
East European Union countries near Ukraine have called for
measures to curb flows of cheaper Ukrainian grain to their
markets.
(Reporting by Gus Trompiz in Paris and Naveen Thukral in
Singapore; Editing by Subhranshu Sahu, Rashmi Aich and Sharon
Singleton)
