Soy, wheat on track for 2nd annual drop

FE Team | Published: January 01, 2025 00:06:24

PARIS/SINGAPORE, Dec 31 (Reuters): Chicago soybean, wheat and corn futures were set for second straight annual declines on Tuesday as world supplies remained ample, though weather concerns helped prices regain some ground at the year's end.
Forecasts of dry conditions for corn and soy crops in Argentina as well as poor early growth for Russian wheat could underpin grain markets in early 2025, but expectations of record soybean output in top supplier Brazil are likely to keep a lid on prices of the oilseeds.
Trade flows are another question mark for grains, as they do for wider markets next year, with Donald Trump's return to the White House poised to generate new tariffs and top wheat exporter Russia seeking to curb shipments.
Soybean, wheat and corn edged higher on Tuesday in light holiday trading, supported by an easing of the dollar index.
By 1202 GMT, the most active soybean contract on the Chicago Board of Trade (CBOT) was up 0.5 per cent at $9.96-1/2 a bushel, wheat 0.5 per cent higher at $5.50-3/4 a bushel and corn 0.6 per cent up at $4.54-3/4 a bushel.
Over the year, the soybean benchmark was down 23 per cent, wheat 12 per cent lower and corn 3.5 per cent off.
All three crops hit their lowest levels since 2020 over the course of this year, with soybeans returning to that trough in mid-December as beneficial rain increased prospects of a record Brazilian harvest in early 2025.
But an unfavourable weather outlook in Argentina, a major exporter of corn and soybean byproducts, has tempered optimism about South American supply.
Brisk US export demand, partly due to buyers in countries like China anticipating tariffs during Trump's upcoming term, has also put a floor under prices. On Monday, corn struck a six-month peak, soybeans a one-month high and wheat a two-week top.
"Funds have bought grains and oilseeds over the past week due to Argentina's warm and dry near-term forecasts," Peak Trading Research said in a note.
"Looking forward, traders are watching South American weather forecasts and US cash (market) signals ahead of next week's index rebalance, (US) job numbers, and the January USDA (world crop) report," it said.