U.S. grains: Crop prices seesaw as traders eye China talks

Chicago | Reuters — U.S. grain and soy futures seesawed on Friday as traders waited for signs that Washington and Beijing were making progress toward a trade agreement that could boost Chinese imports of U.S. crops.

After the close of trading, U.S. Agriculture Secretary Sonny Perdue said on Twitter that China, in a meeting at the White House, committed to buy an additional 10 million tonnes of U.S. soybeans.

Some traders said even bigger commitments were needed, though. U.S. soy shipments to China dried up last year when Beijing imposed tariffs on imports of U.S. farm products, including soybeans, as part of the trade war between the globe’s two largest economies.

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Uncertainty about the prospects for a deal to resolve the dispute kept a lid on agricultural futures, traders said.

“The feeling is, ‘Let’s walk away and see what happens with the administration and the U.S.-China talks,'” said Karl Setzer, operations manager in Michigan for Citizens LLC, a U.S. grain elevator company.

The nearby soybean contract on the Chicago Board of Trade slipped 3/4-cent, to $9.10-1/4 a bushel (all figures US$). CBOT corn lost 1/4-cent, to $3.75-1/4, and CBOT wheat edged 1/4-cent higher, to $4.86-3/4.

Stakes are higher for farmers in the trade negotiations because China is the world’s largest soy importer and a major buyer of other goods such as grain sorghum.

The U.S. Department of Agriculture said it expected the value of U.S. farm exports to drop by $1.9 billion, to $141.5 billion, in fiscal 2019, versus 2018, led by a steep decline in shipments to China.

However, USDA separately projected that U.S. soybean exports would rise to 2.025 billion bushels in 2019-20, from 1.875 billion in 2018-19.

Traders questioned the soy export forecast because of uncertainty over demand from China and stiff competition for business from other shippers such as Argentina.

“I’m still scratching my head,” said Jim Gerlach, president of A/C Trading in Indiana.

USDA, in another report, said soy export sales for the six weeks ended Friday totalled 6.91 million tonnes, toward the low end of analysts’ expectations for 6.1 million to 9.6 million tonnes.

U.S. corn export sales during the period were 6.086 million tonnes, within analysts forecasts for four million to 7.25 million tonnes. But wheat export sales reached 3.819 million tonnes, topping estimates for two million to 3.3 million tonnes.

— Tom Polansek reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris, Naveen Thukral in Singapore and PJ Huffstutter in Chicago.

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