U.S. grains: Soybeans up after Trump comments on China, trade

CBOT January 2019 soybeans, with 20-day moving average. (Barchart)

Chicago | Reuters — U.S. soybean futures ended higher on Friday after rebounding on President Donald Trump’s comments that his administration may not have to impose further tariffs on China, the world’s biggest soybean buyer.

Wheat added to early advances and corn pared losses after the comments.

Trump has imposed tariffs on $250 billion of Chinese imports to force concessions from Beijing on a list of demands that would change the terms of trade between the two countries (all figures US$). China has responded with import tariffs on U.S. goods, including soybeans.

Trump has also threatened to impose tariffs on all remaining Chinese imports, about $267 billion worth, if Beijing fails to address U.S. demands.

“We may not have to do that,” Trump told reporters on Friday. “China would like to make a deal.”

At the Chicago Board of Trade, January soybeans settled up 3-1/2 cents at $8.92-1/4 per bushel, after dipping to $8.81-3/4.

CBOT December wheat ended up 1-1/4 cents at $5.06-3/4 a bushel while December corn fell 2-3/4 cents to finish at $3.64-3/4 a bushel.

Trump’s comments triggered a bounce in a soy market that has been highly sensitive to news about U.S.-China trade relations. U.S. soybean shipments to China have dried up in recent months after Beijing raised tariffs as part of the trade dispute between the world’s two biggest economies.

An expected meeting between Trump and Chinese President Xi Jinping on the sidelines of a G20 summit in two weeks has raised hopes of a settlement.

“You have a lot of speculative shorts in the soybean market that are nervous. They are bearish soybean fundamentals, but know that if there is a deal, they are at risk,” said Arlan Suderman, INTL FCStone chief commodities economist.

Soymeal futures got an added boost after the U.S. Department of Agriculture reported export sales in the latest week at 432,300 tonnes, topping trade expectations.

CBOT wheat closed mixed, with nearby December gaining against back months on technical buying and short-covering.

Corn futures eased despite USDA reporting weekly corn export sales of 893,900 tonnes (old and new crop years combined), toward the high end of trade expectations.

Traders were still absorbing USDA’s larger-than-expected world corn stocks forecast, said Jason Roose of Iowa-based U.S. Commodities.

USDA on Nov. 8 nearly doubled its forecast of global 2018-19 corn ending stocks to 307.5 million tonnes, from 159.35 million previously, reflecting revised Chinese stocks figures.

“There is still really no shortage of grain,” Roose said.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Manolo Serapio Jr. in Manila.

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