U.S. grains: Soy firm after USDA data, focus turns to China talks

CBOT March 2019 soybeans with Bollinger (20,2) bands. (Barchart)

Chicago | Reuters — U.S. soybean futures ended firm on Friday as late-session short-covering lifted prices from lows notched after the U.S. Department of Agriculture (USDA) projected record large U.S. soy stocks amid a still-unresolved trade dispute with top importer China.

Corn eased after USDA released a flood of data Friday, some of it delayed by the recent government shutdown, showing plentiful supplies and lighter U.S. domestic demand, and large upcoming harvests in South America.

Wheat was mostly higher, supported by USDA’s estimate of the lowest U.S. winter wheat acreage in more than a century and improving U.S. export prospects.

Given the lack of major surprises in the USDA data, grain markets struggled to break out of recent trading ranges. Traders remained cautious amid uncertainty over a U.S. trade deal with China and moderating crop weather in Brazil and Argentina.

“We’re right to be back to watching progress on trade talks and South American weather,” said Terry Reilly, senior commodities analyst with Futures International.

Thursday’s news that U.S. President Donald Trump and China’s Xi Jinping are unlikely to meet before a March 1 negotiating deadline, when U.S. tariffs on Chinese goods are set to rise, dampened hopes of a breakthrough in trade talks.

The two sides will hold talks in Beijing next week, with deputy-level meetings to start on Monday and high-level talks to follow, a White House spokeswoman said on Friday.

Chicago Board of Trade (CBOT) March soybeans ended 1-1/4 cents higher at $9.14-1/2 a bushel, but were down 0.2 per cent in the week (all figures US$). It was the market’s second straight weekly drop.

March corn was 2-1/4 cents lower at $3.74-1/4 a bushel. The 1.1 per cent weekly decline was the market’s third straight weekly loss.

CBOT March wheat was up four cents at $5.17-1/4 a bushel but 1.3 per cent lower in the week after a steep decline in the prior session.

USDA projected U.S. winter wheat acres at the lowest in 110 years following years of expanding global production.

Wheat futures also drew some support from improving export demand after top importer Egypt bought two cargoes of U.S. soft red winter wheat in a snap tender.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.


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