Chicago soybean futures edged lower on Wednesday, giving up the previous session’s gains as record Brazilian production and improving weather in Argentina boosted world supply prospects.
Wheat lost ground against the backdrop of abundant supplies in key exporting countries, while corn ticked higher.
The Chicago Board of Trade most-active soybean contract fell 0.3 percent to $10.21 a bushel by 0229 GMT, trading close to Monday’s more than two-week low.
Wheat fell 0.2 percent to $4.20 a bushel and corn added 0.1 percent to $3.60 a bushel.
Soybeans are under pressure from improving South American crop weather. Worries about flooding in Argentina’s soy belt lifted soybean futures to a six-month high on Jan. 18, but values have since retreated.
The line-up of vessels expected to load soybeans at Brazilian ports over the next month shows a spike in shipments
to around twice the level of a year ago due to a speedy harvest and strong global demand.
Brazilian soybean exports come as a direct challenge to U.S. overseas sales.
“The South American soybean supply picture is looking pretty good,” said Phin Ziebell, agribusiness economist at National Australia Bank. “Going forward the question is, how U.S. planting is going to respond to low prices. As of now we have yet to see a big response to low prices.”
U.S. farmers are due to start planting corn and soybeans in the months ahead.
Commodity funds have built their biggest net long position in soybean futures since mid-July, leaving the market vulnerable to long liquidation.
The U.S. Department of Agriculture’s monthly report on oilseed crushings will likely show that 170.6 million bushels of soybeans were processed in December, a Reuters poll of eight analysts showed on Tuesday.
The agency is scheduled to issue its report at 2000 GMT on Wednesday. The U.S. November soy crush was 170.7 million bushels.
Corn and wheat prices have faced headwinds from worsening relations between the United States and Mexico.
U.S. food producers and shippers are trying to speed up exports to Mexico and line up alternative markets as concerns rise that this lucrative business could be at risk if clashes over trade and immigration between the Trump administration and Mexico City escalate.
Mexico is one of the top three markets for U.S. farm production.