Chicago | Reuters — U.S. soybean futures climbed to their highest in more than a month on Tuesday in a turnaround from recent declines that were driven by concerns about the U.S.-China trade dispute hurting American exports.
Corn futures also set a one-month high, while wheat pulled back from a one-month high reached on Monday.
The soybean market is particularly exposed to the trade dispute because the oilseed is the biggest U.S. agricultural export to China. Shipments have nearly dried up since Beijing applied an additional tariff on U.S. soybeans in July.
The most actively traded soy contract has lost about 30 per cent since mid-June because of expectations that U.S. soy stockpiles will swell due to the trade spat and a massive autumn harvest.
The contract was due for a rebound after approaching a 10-year low last week, traders said.
“With prices so low, some may take this as a buying opportunity in soybeans,” said Charles Clack, agricultural commodity analyst at Rabobank.
Chicago Board of Trade most active soybeans gained 0.6 per cent to $8.45-3/4 a bushel (all figures US$). The contract traded up to $8.58, its highest price since Aug. 24.
Corn ended up 0.9 per cent to $3.63-3/4 a bushel. The front-month contract touched its highest price since Aug. 20. Wheat dropped 1.2 per cent to $5.20-3/4 a bushel as traders booked profits.
“The soybeans are the leader here today,” said Don Roose, president of Iowa-based broker U.S. Commodities. “The bottom line is we just reached value.”
China is starting to buy more Argentine soybeans because of Beijing’s trade battle with the United States, and Argentina will in turn purchase more U.S. soybeans to meet its own needs, oilseeds analysts Oil World said on Tuesday.
The U.S. soybean crop was 14 per cent harvested as of Sunday and corn was 16 per cent harvested, according to U.S. Department of Agriculture (USDA) data issued on Monday.
“There’s no debating we are going to harvest a big crop,” Kevin Van Trump, president of U.S. consultancy Farm Direction, said about corn. “On the flip side, I continue to see a strong demand story building.”
USDA said exporters struck deals to sell 239,630 tonnes of U.S. corn for delivery to Mexico during the 2018-19 marketing year.
In the wheat market, prices came under pressure from rains that improved conditions for harvests in Russia, the world’s top exporter of the grain, traders said. This could also increase competition for other global suppliers, such as the U.S. and the EU.
— Tom Polansek reports on agriculture and ag commodity markets for Reuters from Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.