Forexpros – Soybean futures snapped a four-day winning streak on Thursday, easing off a four-month high despite news China signed deals for a record-setting purchase of U.S. soybeans as fears over a potential Greek debt default prompted investors to flock to the perceived safety of the U.S. dollar.
On the Chicago Mercantile Exchange, soybeans futures for March delivery traded at USD12.5362 a bushel during European morning trade, shedding 0.55%.
It earlier fell by as much as 0.55% to trade at a session low USD12.4638 a bushel.
Soy prices were affected by outside influences, taking cues from the currency market, as the U.S. dollar strengthened after reports emerged Wednesday that European Union officials were looking at ways to delay the second Greek bailout until after general elections in April.
Greece has a EUR14.5 billion bond repayment due on March 20 and requires the bailout funding in order to be able to make that payment and avoid a messy default.
The news prompted investors to shun riskier assets, such as industrial commodities and stocks and flock to traditional safe haven assets like the U.S. dollar.
The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.5% to trade at 80.14, the highest since January 25.
A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes commodities less attractive as an alternative investment.
Soybean prices remained supported after a Chinese trade delegation signed agreements with U.S. grain companies on Wednesday to buy 8.62 million tonnes of soybeans from the U.S. and will ink more deals on Thursday for a record-setting purchase topping 12 million tonnes.
At a similar event last year, Chinese companies signed deals to buy 11.5 million tonnes of U.S. soybeans valued at USD6.7 billion in the then largest one-off purchase of U.S. soybeans.
China imports 60% of soybeans shipped around the world, with the bulk of its purchases coming from the U.S. and Brazil, the world’s top exporters.
Concerns over damage to the soy crop in Brazil fuelled speculation China would import fewer soybeans from the South American country and increase its reliance on U.S. supplies.
Elsewhere on the Chicago Mercantile Exchange, wheat for March delivery dipped 0.1% to trade at USD6.2563 a bushel, while corn for March delivery shed 0.3% to trade at USD6.2438 a bushel.
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