U.S. grains: Soy firm on export sales, trade optimism

CBOT November 2019 soybeans with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. soybean futures firmed on Thursday as strong weekly export sales data and hopes for progress toward a U.S.-China trade deal more than offset pressure from a crop-boosting Midwest weather forecast.

Corn also rose as the market weighed favourable harvest weather against signs of improved demand for the grain, while wheat retreated in a profit-taking setback from the prior session’s one-month highs.

Grain markets have been weighed down by expectations for above-normal temperatures in U.S. Midwest corn and soybean areas into October. The warmer weather was seen accelerating lagging crop maturity and lessening the risk that yields could be damaged by frost.

Futures, however, rebounded from overnight lows after the U.S. Department of Agriculture reported weekly U.S. corn and soybean export sales above trade expectations.

Chicago Board of Trade November soybeans rose 4-1/4 cents to $8.93 a bushel while December corn added 1-1/2 cents to settle at $3.72-3/4 a bushel (all figures US$). CBOT December wheat shed 1-1/2 cents to $4.88 a bushel.

“A good export sales number is being offset by a non-threatening weather forecast,” said Ted Seifried, chief market strategist with the Zaner Group.

USDA reported a net 1.728 million tonnes of U.S. soybeans were sold for export last week, along with 1.467 million tonnes of corn, both above trade expectations.

The market is “cautiously optimistic” that recent goodwill gestures from Beijing, including some long-sought U.S. soybean purchases, may move the United States and China closer to a deal to end the trade war, Seifried said.

U.S. and Chinese deputy trade negotiators were set to resume face-to-face talks for the first time in nearly two months on Thursday. The negotiations, on Thursday and Friday, are aimed at laying the groundwork for high-level talks in early October.

Mild weather is forecast to continue in the U.S. Midwest over at least the next 15 days. Above-normal rain over that term could help crops that have lacked moisture this month but may also delay some early harvesting.

Wheat prices have been underpinned by concerns about dry weather in some key producing areas around the world.

The dry conditions may reduce yield prospects for upcoming harvests in Australia and Argentina, and parched conditions ahead of sowing in Europe and the Black Sea region have shifted attention away from high global inventories.

Dry weather across most of Ukraine has delayed the sowing of winter grain for next year’s crop, the nation’s weather forecaster said.

— 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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