U.S. grains: Soybeans drop on renewed China trade concerns

(Photo courtesy United Soybean Board)

Chicago | Reuters — U.S. soybean futures fell for the first time in five sessions on Thursday on new concerns that the U.S.-China trade war may stretch beyond a March 1 deal deadline, with the two countries’ leaders unlikely to meet during upcoming talks.

News that U.S. President Donald Trump and China’s Xi Jinping are unlikely to meet dashed hopes that the two sides were progressing on a deal to end a bitter trade fight that has slashed Chinese purchases of U.S. soy.

Corn and wheat also retreated, pressured by technical selling and profit-taking as investors moved to the sidelines ahead of U.S. crop data due on Friday, some of it delayed by the recent U.S. government shutdown.

“The discussion that Trump is unlikely to meet with President Xi is getting the trade’s attention,” said Rich Nelson, chief strategist with Allendale Inc.

“There’s no deal likely next week. If nothing else, we might get a framework done, but it’s likely this will be part of a process going forward,” he said.

Earlier on Thursday, White House adviser Larry Kudlow said in an interview on Fox Business Network that there was a sizable distance to go in U.S.-China trade talks.

Chicago Board of Trade (CBOT) March soybeans fell 8-1/2 cents to $9.13-1/4 a bushel, a 2-1/2-week low (all figures US$). Technical selling as the contract broke below chart support at its 200-day moving average and recent lows around $9.13 accelerated losses.

CBOT March wheat dropped 12-3/4 cents, to a 1-1/2 week low of $5.13-1/4 a bushel, and March corn shed 3-1/2 cents, to $3.76-1/2 a bushel. Selling accelerated as both contracts breached support at several key moving averages.

Market participants were waiting for a long list of U.S. Department of Agriculture crop forecasts and estimates due on Friday after key reports were delayed due to the 35-day partial government shutdown.

Improving crop weather in South America following hot, dry conditions in parts of Brazil and excessive rains in Argentina further weighed on grains.

The soy harvest in Brazil’s second-largest producing state of Parana is well ahead of last season, with limited damage to the fields from drought, state agricultural research body Deral said on Tuesday.

— Karl Plume reports on agriculture and ag commodities for Reuetrs from Chicago; additional reporting by Colin Packham in Sydney and Sybille de La Hamaide in Paris.


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