Chicago | Reuters — U.S. soybean futures jumped more than two per cent on Monday after Washington and Beijing agreed to drop tariff threats, easing fears that demand for U.S. shipments to top importer China could slow.
Corn prices were little changed, while wheat dropped on crop-boosting rains in the U.S. Plains wheat belt and pressure from a stronger dollar, which makes U.S. shipments costlier for overseas buyers.
The U.S. trade war with China is “on hold” after the world’s two largest economies agreed to drop their tariff threats while they work on a wider trade agreement, U.S. Treasury Secretary Steven Mnuchin said on Sunday.
Mnuchin said the U.S. expects to see an increase of between 35 and 40 per cent in agricultural exports to China this year alone, but did not specify to which agricultural products he was referring. President Donald Trump said China pledged to buy “massive amounts” of U.S. agricultural products, but did not offer details.
“The market is excited about the news about progress with China on trade,” said Rich Nelson, chief strategist with Allendale Inc.
Traders are anticipating soybeans to be among the greatest beneficiaries of the easing trade tensions.
Chicago Board of Trade July soybeans rose 26-3/4 cents, or 2.7 per cent, to $10.25-1/4 a bushel (all figures US$).
But the upside in U.S. soybean prices is limited as cheap supplies of newly harvested Brazilian soybeans are beginning to flood the global market.
Orders for nearly one million tonnes of U.S. soybean exports were canceled last week, according to U.S. government data, as cheap supplies from Brazil made U.S. cargoes less attractive to buyers.
CBOT July corn was 1/4 cent higher at $4.02-3/4 a bushel, and July soft red winter wheat futures fell 11 cents to $5.07-1/4 a bushel. Both notched two-week peaks before slipping from the highs.
Rainy weather in the drought-hit Plains wheat belt pressured prices for the grain while concerns about rain-delayed Midwest plantings underpinned corn as showers chased farmers from fields on Monday.
The U.S. Department of Agriculture said 81 per cent of the corn crop had been planted as of Sunday along with 56 per cent of the soybean crop, both slightly above analyst estimates.
— Karl Plume reports on agriculture and agribusiness for Reuters from Chicago; additional reporting by Nigel Hunt in London, Naveen Thukral in Singapore and Colin Packham in Sydney.