U.S. grains: Soybeans up on increased optimism for trade deal

Chicago | Reuters — U.S. soybean futures crawled higher on Friday on increased optimism that the U.S. and China may soon strike a deal to ease their trade war.

Sentiments improved about the prospects for an agreement after White House economic adviser Larry Kudlow said on Thursday evening that the two sides were “getting close” to a deal, traders said. It was a switch after doubts about the potential for an interim deal pressured soybean futures on Thursday.

Traders and farmers are paying close attention to trade negotiations because U.S. agricultural exports have suffered since Beijing imposed retaliatory tariffs on American soybeans and other farm goods in 2018 as part of the trade war.

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U.S. Department of Agriculture data issued on Friday showed China was the top buyer of U.S. soybeans during the week ended Nov. 7, accounting for 61 per cent of the weekly total of 1.256 million tonnes.

Farmers hope a trade deal will open the door for even more sales to China, the world’s top soybean importer.

“USDA export sales were not that bad and included a good chunk to China again,” said Terry Reilly, senior commodity analyst for Futures International in Chicago.

Since the start of the marketing year for soybeans on Sept. 1, Chinese buyers have committed to buying 8.036 million tonnes from the United States. Of that total, 3.153 million tonnes have been shipped.

That is up from a year ago, when 647,990 tonnes in soybean sales had been booked by Chinese buyers and 339,003 tonnes had been shipped.

“China has been a steady buyer of U.S. beans since September, although export commitments are still running well below pre-tariff levels,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.

Most-active January soybeans edged up 0.1 per cent to $9.18-1/4 a bushel at the Chicago Board of Trade (all figures US$). Gains in soymeal futures helped support soybeans, traders said. December soymeal jumped 1.3 per cent to $307.10 per short ton.

U.S. oilseed processors crushed a record-large volume of soybeans in October, according to National Oilseed Processors Association data.

The most-active corn contract fell 1.3 per cent to $3.71-1/4 a bushel and touched its lowest price since Sept. 27. Wheat dropped one per cent to $5.02-3/4 a bushel at the CBOT and reached its lowest price since Oct. 31.

Weekly U.S. corn export sales were in line with analysts’ estimates at 581,600 tonnes. Weekly U.S. wheat export sales of 238,600 tonnes were near the low end of forecasts.

— Reporting for Reuters by Tom Polansek in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.

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