U.S. grains: Fresh sales to China fuel soy optimism

CBOT November 2019 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. soybean futures jumped to a one-month high on Thursday on news of fresh export sales to China and signs of a possible easing of the U.S. trade dispute with the world’s biggest buyer of the oilseed.

Corn and wheat futures also rose, following soybeans.

Meanwhile, the U.S. Department of Agriculture (USDA) lowered its estimates of the U.S. 2019 corn and soybean crops, but not as much as some analysts had expected.

Chicago Board of Trade November soybeans settled up 29 cents at $8.95-1/2 per bushel after reaching $8.96, the contract’s highest since Aug. 13 (all figures US$).

CBOT December corn ended up 7-1/4 cents at $3.67-1/4 a bushel and December wheat rose 6-1/4 cents to settle at $4.83-3/4 a bushel.

Chinese importers bought at least 10 cargoes of U.S. soybeans on Thursday, or about 600,000 tonnes, for shipment from Pacific Northwest export terminals, two traders with direct knowledge of the deals said.

The deals, China’s first U.S. soybean purchases in a month and the largest since at least June, come ahead of U.S.-China trade talks set for early October in Washington. Lower-level U.S. and Chinese officials are expected to meet within days.

“Soybeans are higher because of the China news,” said Brian Hoops, president of Midwest Market Solutions.

Beijing earlier on Thursday said Chinese companies have started to inquire about prices for U.S. agricultural goods purchases, and Chicago Mercantile Exchange lean hog futures surged their daily limit.

The U.S.-China trade developments overshadowed USDA’s monthly crop production report for September. In it, USDA lowered its U.S. 2019-20 corn yield estimate to 168.2 bushels per acre, down from 169.5 in August but above the average estimate in a Reuters analyst poll of 167.2.

Similarly, USDA trimmed its U.S. soybean yield estimate to 47.9 bu./ac., down from 48.5 in August but above the average Reuters poll estimate of 47.2.

USDA cut its U.S. corn production estimate to 13.799 billion bushels and pared its soybean production estimate to 3.633 billion bushels.

“There’s uncertainty with the acres and uncertainty with the yield yet. The October (USDA) report will probably be more important than the September report. Bottom line, there’s no respect for this September report because the crop’s just too immature,” said Don Roose, president of Iowa-based U.S. Commodities.

Favourable U.S. weather forecasts hung over the market, with warmer-than-normal temperatures expected to boost supply by accelerating the maturity of late-planted crops and cutting the risk of frost damage.

Reporting for Reuters by Julie Ingwersen; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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