Soybeans extend gains as trade deal possibility ups demand hopes

The most active soybean futures on the Chicago Board Of Trade rose 0.1% to $9.17 a bushel

  
Image used for illustrative purpose. Male hands holding a sieve and throws up soybean grains.

Image used for illustrative purpose. Male hands holding a sieve and throws up soybean grains.

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SYDNEY - U.S. soybeans rose for a third consecutive session on Tuesday, as an expected trade agreement between Washington and Beijing stoked hopes of increased demand for North American oilseeds.

Corn edged higher, extending two-day gains to nearly 1 percent, while wheat fell.

The most active soybean futures on the Chicago Board Of Trade rose 0.1 percent to $9.17 a bushel by 0220 GMT, having firmed 0.5 percent on Monday when prices hit a high of $9.24-3/4 a bushel - the highest since Feb. 1.

"The market has been oscillating between optimism and pessimism over the U.S.-China trade deal. The deal appears likely, which is supporting the market," said Phin Ziebell, an agri-business economist at National Australia Bank.

The United States and China appear close to a deal to remove tariffs, a source briefed on negotiations said on Sunday, while the Wall Street Journal reported that U.S. President Donald Trump and Chinese President Xi Jinping could reach a formal trade deal at a summit later this month.

Analysts also noted flooding and ice buildup on key rivers in the U.S. Midwest that has stalled the movement of barges that supply export terminals at the Gulf of Mexico with grain and soy.  

The most active corn futures were up 0.2 percent to $3.75-1/4 a bushel, having gained 0.5 percent in the previous session.

The most active wheat futures fell 0.1 percent to $4.55-1/4 a bushel, having closed down 0.4 percent on Monday.

Wheat remains under pressure as major wheat importers continue to shun U.S. supplies for cheaper alternatives.

Ample global supplies also loom over the market.

Australia's wheat production is expected to jump 38 percent in 2019/20 from the just completed drought-hit season, but only if farmers receive desperately needed rain, the country's chief commodity forecaster said on Tuesday.

(Reporting by Colin Packham; Editing by Rashmi Aich)

(( colin.packham@thomsonreuters.com ; +61-2 9321 8161; Reuters Messaging: colin.packham.thomsonreuters.com@reuters.net ))

© Reuters News 2019

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