|14 August, 2019

Soybean rises on U.S.-China trade hopes, wheat up 1%

The most-active soybean contract on the Chicago Board of Trade gained 0.2% at $8.91 a bushel

Image used for illustrative purpose. Soy beans are seen at a Grobocopatel Hermanos company storage plant in Carlos Casares, Argentina April 16, 2018. Picture taken April 16, 2018.

Image used for illustrative purpose. Soy beans are seen at a Grobocopatel Hermanos company storage plant in Carlos Casares, Argentina April 16, 2018. Picture taken April 16, 2018.

REUTERS/Agustin Marcarian

SINGAPORE  - Chicago soybean futures climbed for a second session on Wednesday, supported by easing U.S.-China trade tensions and concerns over dry weather in parts of the U.S. Midwest.

Corn gained ground on bargain-buying after dropping almost 10% in the last two sessions, the biggest two-day drop in six years, while wheat was up 1%.

The most-active soybean contract on the Chicago Board of Trade gained 0.2% at $8.91 a bushel by 0249 GMT, corn added 0.8% to $3.79-1/2 a bushel and wheat was up 1.2% at $4.77-1/2 a bushel.

The corn market has lost nearly 10% in the last two sessions, the biggest since 2013.

"There seems to be some support for beans on easing of trade tensions between Washington and Beijing, although I think it's very early and this issue is very much still live," said Phin Ziebell, agribusiness economist, National Australia Bank.
"There is plenty of room for caution."

The Trump administration will delay imposing a 10% tariff on certain Chinese products, including laptops and cellphones, that had been scheduled to start next month, the Office of the U.S. Trade Representative said on Tuesday.

Chinese Vice Premier Liu He had a telephone conversation with U.S. trade officials, China's Ministry of Commerce said in a statement on Tuesday. Liu spoke with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin.

U.S. President Donald Trump on Tuesday cited China for not following through with expected large purchases of U.S. agricultural products, but appeared hopeful that Beijing's stance could change.

Forecasts of dry weather in the U.S. Midwest provided additional support for the soybean market.

Corn prices have been weighed down by expectations of a bigger U.S. crop.

The USDA surprised grain markets on Monday by raising its outlook for this year's U.S. corn production as it reduced its estimate of rain-hit plantings by less than expected, while increasing its harvest yield projection.

For the 2019-20 crop year, the corn harvest will total 13.901 billion bushels, based on an average yield of 169.5 bushels per acre, the USDA predicted in its monthly supply and demand report.

Ukrainian farmers have almost completed the 2019 wheat harvest, threshing 27.9 million tonnes from 98% of the sown area, the agriculture ministry said on Tuesday.

Commodity funds were net sellers of Chicago Board of Trade corn and soyoil futures on Tuesday. They were net buyers of soybeans and soymeal, and even in wheat, traders said. 

(Reporting by Naveen Thukral; Editing by Joseph Radford and Shounak Dasgupta)

© Reuters News 2019

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