GRAINS-Soybeans drift lower as U.S.-China deal terms awaited
Subdued grain markets eye Jan. 15 trade deal signing
Traders look past inconclusive USDA corn, soy crop
estimates
(Updates with European trading, changes byline/dateline) By Gus Trompiz and Naveen Thukral
PARIS/SINGAPORE, Jan 13 (Reuters) – Chicago soybean futures
edged lower on Monday as grain markets waited to see if a U.S.-Chinese trade agreement due to be signed this week will herald a significant increase in demand for U.S. crops.
Expectations of a record soybean harvest in Brazil along
with a fall in palm oil futures following a near three-year high
also kept oilseed markets such as soybeans in check.
Chicago wheat eased and corn was flat in a subdued start to
the week on grain markets that also reflected limited reaction to widely followed U.S. Department of Agriculture (USDA) crop data on Friday.
The most-active soybean contract on the Chicago Board of
Trade was down 0.5% at $9.41-1/2 a bushel by 1223 GMT, after giving up a small early gain. CBOT corn inched up a quarter of a cent to $3.86 a bushel, while wheat lost 0.6% to $5.61 a bushel.
China‘s Vice Premier Liu He will visit Washington to sign
the so-called Phase 1 trade accord with the United States, with a ceremony scheduled for Wednesday.
The agreement, first announced a month ago, helped Chicago
soybeans rally to their highest since June 2018 at the start of
January as it raised hopes that China, the world’s biggest
soybean importer, would revive imports of U.S. supplies. U.S. Treasury Secretary Steven Mnuchin on Sunday reiterated
Washington’s position that China has committed to increase
purchases of U.S. agricultural products to $40-$50 billion annually, but a lack of detail so far on the accord has made
some traders cautious.
“Traders will continue to monitor the signing progress of Wednesday’s trade deal,” brokerage Allendale said in a note. “Market gains were contained by better crop conditions in
South America and higher U.S. corn and soybean production
numbers from the USDA,” it added. Brazilian and Argentine crop belts have seen some beneficial rainfall this month for corn and soybeans, although Refinitiv Agriculture Research analysts said parts of Brazil would see above-average temperatures and lower than normal rainfall in the week ahead.
The USDA raised its U.S. corn and soybean yield estimates,
which surprised some traders following unfavourable crop weather last year and a challenging harvest thereafter. The agency, however, maintained uncertainty over the final size of 2019 crops by saying it would resurvey farmers in five
northern states where poor weather left many acres unharvested.
The USDA also pegged U.S. winter wheat plantings at their lowest level since 1909, although the estimate was slightly above the average trade forecast.
Wheat markets remained underpinned by firm cash prices
globally, reflecting steady demand, a strong rouble in top wheat
exporter Russia and transport snags due to strikes in France.
Prices at 1223 GMT Last Change Pct End Ytd Pct Move 2019 Move CBOT wheat 561.00 -3.50 -0.62 558.75 0.40 CBOT corn 386.00 0.25 0.06 387.75 -0.45 CBOT soy 941.50 -4.50 -0.48 955.50 -1.47 Paris wheat Mar 192.00 0.50 0.26 188.75 1.72 Paris maize Mar 172.50 -0.50 -0.29 171.75 0.44 Paris rape Feb 420.25 -1.25 -0.30 411.50 2.13 WTI crude oil 59.03 -0.01 -0.02 61.06 -3.32 Euro/dlr 1.11 0.00 0.03 1.1210 -0.78 Most active contracts – Wheat, corn and soy US cents/bushel,
Paris futures in euros per tonne
(Reporting by Gus Trompiz in Paris and Naveen Thukral in
Singapore, Editing by Sherry Jacob-Phillips and David Evans)
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