Soybeans flat, face weekly decline on global recession fears

Chicago soybean futures were largely unchanged on Friday, with the market poised for a weekly decline as concerns over slowing global economy weighed on prices.

Wheat ticked lower, although the market is set for a weekly gain on bargain buying after prices dropped to a two-month low last week, while it is on track to end the week on a positive note.

FUNDAMENTALS

The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 added 0.1% to $14.75-1/4 a bushel, as of 0119 GMT, wheat Wv1 gained 0.1% at $7.57-3/4 a bushel and corn Cv1 rose 0.2% to $6.54-1/2 a bushel.

For the week, soybeans are down around half a percent, wheat has added more than 3% and corn is up 1.5%.

Agricultural markets are being weighed down by fears of a global recession.

A day after the US Federal Reserve said it expected rates to stay higher for longer, US retail sales fell more than expected in November, while the labour market remained tight.

The Bank of England similarly pointed to more possible rises as it also increased rates on Thursday.

The pressure on soybean market comes despite strong demand and concerns over South American crops.

The US Agriculture Department said on Thursday morning that export sales of soybeans totalled 2.943 million tonnes in the week ended Dec. 8. That was up 69% from a week earlier and above the high end of trade forecasts that ranged from 1.5 million to 2.6 million tonnes

Rainfall over recent days has not been enough for successful planting of soybeans after an extended drought in Argentina's core agricultural areas, the Buenos Aires grains exchange said on Thursday.

European Union production of major cereal crops should rise next year after a 2022 harvest marked by drought and heatwaves, consultancy Strategie Grains said on Thursday.

In initial projections for the 2023 harvest, Strategie Grains forecast soft wheat production at 128.7 million tonnes, up 2.5% from 125.5 million this year.

For maize, it anticipated output would recover to 63.7 million tonnes, up 26% from a 15-year low of 50.5 million for 2022.

Commodity funds were net buyers of CBOT corn, wheat and soyoil futures contracts on Thursday and net sellers of CBOT soybeans and soymeal, traders said. 

MARKET NEWS

Global shares slumped on Thursday, while the US dollar gained and Treasury yields ticked down, after major central banks hiked interest rates in their final policy decisions of the year.