Grains, soy futures weaken

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    CHICAGO- US grain and soybean futures crumbled as traders booked profits after being spooked by a US air strike in Iraq that escalated geopolitical tensions in the Middle East.

    The strike that killed Iran’s most prominent military commander put markets on edge and opened the door for a setback a day after most-active soybean and wheat contracts each hit 2018 highs, traders said. Wall Street’s major indexes also fell, while hog futures sank by their daily trading limit.

    “When in doubt, get out,” said Jim Gerlach, president of commodities broker A/C Trading in Indiana.

    The Chicago Board of Trade’s most-active soybean contract dropped 1.6 percent to $9.41-1/2 a bushel. The decline came after the most-active contract on Thursday touched its highest price since June 2018.

    Wheat slumped 0.9 percent to $5.54-1/2 a bushel at the CBOT, after the most-active contract reached its highest price since August 2018 on Thursday. Corn slid 1.5 percent to $3.86-1/2 a bushel.

    Analysts said they expected the markets would soon shift their focus from tensions in the Middle East back to an initial US-China trade deal and the release of US Department of Agriculture (USDA) crop data next week.

    “We’ve had a good run, and sometimes the markets are looking for an excuse and I think they found one,” Gerlach said.

    Traders are waiting for the USDA to issue crop production data on Jan. 10 amid uncertainty about the size of last year’s corn harvest, which was delayed by cold, wet weather. They also want to see how the agency adjusts forecasts for crop exports to China, after Washington and Beijing struck a Phase 1 trade agreement last month.

    China committed to buying more US farm products as part of the deal, although it has not been signed and details have not been announced. China, the world’s top soybean importer, slashed purchases of American farm goods during the countries’ trade war and bought soy from South America instead.

    The USDA said total US soybean export sales last week were 332,047 tons, below analysts’ expectations for 350,000 tons to 1.05 million tons. China bought 160,241 tons for 2019/20 delivery, including about 132,000 tons switched from unknown destinations.

    Weekly US corn export sales of 539,991 tons were within analysts’ estimates, while wheat sales of 333,250 tons were toward the low end of expectations.

    There are “ideas the wheat market has run out of gas for the moment,” brokerage CHS Hedging said. – Reuters