Chicago | Reuters — U.S. soybean futures rose for a sixth straight session on Monday on expectations that Beijing will meet the purchasing targets agreed in the Phase One trade deal with Washington, although concerns about the coronavirus outbreak in China capped gains.
The most active soybean futures contract on the Chicago Board Of Trade closed the day up 0.34 per cent at $8.84-1/4 a bushel (all figures US$).
Corn futures slipped 0.52 per cent to $3.81-3/4 a bushel, as profit-taking saw corn paring most of its gains from the previous session. Technical selling and weakness in the corn market pushed wheat futures down 1.39 per cent to end at $5.52 a bushel.
Chinese President Xi Jinping told U.S. President Donald Trump that China would meet its Phase One trade deal purchasing targets despite delays linked to the coronavirus, White House adviser Larry Kudlow told Bloomberg Television.
Traders said the commodities market was waiting for proof of fresh Chinese demand before pushing prices any higher.
Some of those cues are expected to come from the closely watched U.S. Department of Agriculture’s monthly supply and demand forecast report, set to be released on Tuesday.
But the market’s hopes for big news on Chinese demand for U.S. soybeans has cooled somewhat, said traders. The report will factor in the broad goals of the Phase One trade deal, but details of China’s purchase commitments will not be part of it, the agency’s top economist said last week.
“The trade has lowered its expectations, in part because people are taking what USDA is saying at face value,” said Global Commodity Analytics analyst Mike Zuzolo.
Analysts said the reiteration of Chinese commitments to buy U.S. supplies was underpinning gains. However, the coronavirus epidemic that has killed more than 900 people in top buyer China continued to weigh on prices.
Traders also noted the competition U.S. farmers are likely to face from an expected bumper crop from Brazil.
For wheat, traders said signs of drought moving into the U.S. High Plains region should result in a boost in wheat futures going into the USDA report on Tuesday — unless the report shows a large drop in demand.
Chinese importers have recently booked French wheat for shipment during the first half of 2020, traders said, adding to an unusual run of French exports to China in the past few months.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago; additional reporting by Colin Packham in Sydney and Sybille de La Hamaide in Paris.