February 20, 2019 / 7:51 PM / 8 months ago

GRAINS-CBOT wheat plunges to 7-month low, soybeans rebound

* Most active wheat contract traded at lowest on a continuous basis since July 12

* No U.S. wheat offered or bought in Egypt tender

* Soybeans rebound after Tuesday lows

* U.S.-China trade talks watched for progress (Update with closing prices, adds details about contract lows, soybeans rebound)

By P.J. Huffstutter

CHICAGO, Feb 20 (Reuters) - Chicago Board of Trade wheat futures plunged yet again on Wednesday as traders fretted over lagging U.S. exports despite them being competitively priced in the global market.

Soybeans started the day off on the negative side, with the most active soybean contract dipping just below the one-month low struck a day earlier, but ended the day on a positive note on technical buying.

Meanwhile, corn futures remained relatively steady throughout the day, as grain markets watched for developments in the U.S.-Chinese trade discussions.

But for the second session in a row, the market story of the day was wheat. Chicago’s most active wheat contract plunged to a 7-month low on a continuous basis, to its lowest point since July 12.

A key reason, traders said, is that U.S. wheat was not even in the running for a tender by top importer Egypt. The tender was seen as important both for U.S. and EU supplies, after prices on Paris-based Euronext also dropped to multi-month lows this week amid worries that export demand is lagging.

Instead, Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Wednesday it bought 180,000 tonnes of French wheat, 60,000 tonnes of Romanian wheat, 60,000 tonnes of Russian wheat and 60,000 tonnes of Ukrainian wheat, the grains buyer said.

“There is no demand for U.S. wheat right now, it’s that simple,” said commodities broker Craig Turner of Daniels Trading.

Most CBOT wheat futures contracts, including most actively traded May, fell to new contract lows on Wednesday, while Kansas City wheat futures contracts all fell to new lows across the board.

Chicago Board of Trade March wheat on Wednesday settled down 9 cents at $4.80-3/4 per bushel, after falling to $4.75-3/4, a contract low.

SOY INCHES BACK, CORN STEADY

CBOT’s March soybean contract settled on Wednesday up 1-3/4 cents at $9.02-1/2 a bushel. CBOT’s March corn settled up 1 cent at $3.70-3/4 a bushel.

But earlier in the day, traders said the market’s bearish push was encouraged by technical selling and a growing frustration at the lack of updates from the latest round of U.S.-Chinese trade negotiations, which started on Tuesday.

A trade settlement could help revive U.S. soybean shipments to China, the world’s biggest soybean importer, while also heralding large purchases of U.S. cereals.

“There’s a lack of positive news on trade, and everyone is tired of waiting for details,” said Ted Seifried, chief ag market strategist of the Zaner Group.

Soybean futures were also pressured earlier by news of African swine fever continuing to spread in China, and the first cases being confirmed on hog farms in Vietnam on Tuesday, Seifried said.

Adding to that negative tone, Chinese frozen food producer Sanquan Food Co Ltd earlier this week recalled pork dumplings that may have been contaminated with African swine fever, raising market concerns about the potential impact of pork demand among Chinese consumers.

“If Chinese pork demand really falls, that would put a serious crimp in the soybean market,” Seifried said. “If it gets bad, then you have to ask, do the Chinese even need soybeans now?” (Additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Susan Fenton and James Dalgleish)

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