U.S. grains: Soybeans up on trade optimism, Midwest weather

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

Chicago | Reuters — U.S. soybean futures climbed to their highest level in nearly three months on Wednesday before paring gains, supported by optimism about increased Chinese purchases and fears that a winter storm in the upper U.S. Midwest could threaten late-maturing crops.

Corn closed modestly lower and wheat was little changed, with both commodities consolidating after touching near two-month highs and ahead of a U.S. government crop report due on Thursday.

Chicago Board of Trade November soybeans settled up 3-1/4 cents at $9.23-3/4 per bushel after reaching $9.31-1/2, the contract’s highest since July 15 (all figures US$).

CBOT December corn ended down 1-1/2 cents at $3.94-1/4 a bushel after touching $3.97-1/4, its highest since Aug. 12. CBOT December wheat finished unchanged at $5.00-1/4 a bushel after rising to $5.04-1/2, its highest since Aug. 9.

Soybeans rose after the Financial Times reported that the team of China’s lead trade negotiator had offered to boost annual purchases of soybeans to 30 million tonnes compared with 20 million at present as the two countries seek to resolve their trade dispute.

Vice Premier Liu He, China’s top trade negotiator, is scheduled to travel to Washington for their next round of trade talks on Thursday and Friday.

“An additional 10 million tonnes brings them (China) back to where they had been over the last couple years. It’s not anything that would change our balance sheet significantly, but it’s an indication that they are trying to get some sort of an agreement,” said Brian Hoops, analyst with Midwest Market Solutions.

Meanwhile, traders were monitoring a winter storm brewing in the northern U.S. Plains and Rocky Mountains that is expected to bring freezing temperatures late this week into the Dakotas, Nebraska and portions of Minnesota and Iowa.

“While it is not unusual for temperatures to reach these levels during early to mid-October across the north central U.S., a significant portion of the corn and soybean crops have not yet reached maturity,” space technology company Maxar said in a daily weather note.

CBOT corn futures jumped two per cent on Tuesday on worries about potential crop damage and delays from the storm before consolidating on Wednesday.

“We are going to see some harvest delays,” Hoops said. “And we’ve got the (U.S. Department of Agriculture) report out tomorrow, with the expectations of a bullish slant.”

Ahead of USDA’s monthly supply/demand reports, analysts surveyed by Reuters on average expected the government to lower its estimates of U.S. 2019-20 yield, production and ending stocks for both corn and soybeans.

Also Thursday, USDA is set to report on weekly export sales. Traders expected the government to show export sales in the week to Oct. 3 at 300,000 to 600,000 tonnes for wheat, 500,000 to 800,000 tonnes for corn and 1.3 million to 1.8 million tonnes for soybeans.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.

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