Chicago | Reuters — U.S. soybean futures climbed to a 2-1/2-week high on Monday on hopes for a trade agreement between Washington and Beijing and after China vowed late last week to make additional U.S. soybean purchases.
Wheat futures plunged around four per cent to fresh contract lows on technical selling and concerns about stiff global competition in the export market. Corn followed wheat lower.
U.S. President Donald Trump on Monday said he was optimistic a final trade deal with China could be reached, but offered few details.
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Trump said Sunday he would delay an increase in U.S. tariffs on Chinese goods thanks to “productive” trade talks and that he and China President Xi Jinping would meet to seal a deal if progress continues.
China committed to buy an additional 10 million tonnes of U.S. soybeans in a meeting on Friday, U.S. Agriculture Secretary Sonny Perdue said on Twitter.
The commitments are a “show of good faith by the Chinese” and “indications of more good news to come,” Perdue wrote.
Gains in soybeans, however, were tempered by a lack of confirmation of any fresh export deals.
“It sounds like we’re going to have a deal, but the trade wants details and we want to know when. Until we have those details, we’re going to take all that good news with a grain of salt,” said Ted Seifried, chief ag market strategist of the Zaner Group.
Chicago Board of Trade (CBOT) May soybeans were up 1-1/4 cents at $9.25 a bushel after reaching a peak of $9.34-1/2, the highest since Feb. 7 (all figures US$).
CBOT May corn fell 4-1/2 cents to $3.80 a bushel, breaching chart support at its 20-, 50- and 100-day moving averages.
CBOT May wheat dropped 19 cents to $4.72-3/4 a bushel. The 3.9 per cent drop was the steepest for a most-active contract since July 11. All contracts posted new life-of-contract lows.
Wheat was pressured by a lagging pace of U.S. exports amid competition from lower-cost suppliers such as Ukraine and Russia.
“World wheat values continue to come under pressure and that is pulling the wheat down and that’s pulling the corn market down,” Don Roose, president of U.S. Commodities.
The U.S. Department of Agriculture on Monday said 693,964 tonnes of U.S. wheat was inspected for export last week, above market expectations. But season-to-date inspections are about 1.4 million tonnes behind a year ago.
— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.
