U.S. grains: Soybeans climb on Chinese buying ahead of crop report

Wheat wrestles with demand concerns, weather woes

CBOT July 2020 soybeans with Bollinger (20,2) bands. (Barchart)

Chicago | Reuters –– Chicago soybean futures climbed for a second session to a three-week high on Friday as Chinese buying underpinned prices and traders squared positions ahead of a supply and demand report due next Tuesday.

Corn also rose on word China may increase agricultural buying to fulfill commitments laid out in January under the Phase One trade deal with the United States.

Wheat was little changed as concerns over the coronavirus crisis hitting world demand offset worries about adverse U.S. weather conditions.

The most active soybean contract on the Chicago Board of Trade settled up 6-1/4 cents at $8.50-1/2 a bushel, after reaching $8.56-1/2, the highest since April 23 (all figures US$). The contract ended the week up one cent.

CBOT July wheat ended down 1/2 cent at $5.22 a bushel. For the week, the contract rose 5-1/2 cents, or 1.1 per cent, ending in positive territory for the first time since April 10.

July corn was up 1-1/4 cents to $3.19-1/4, and for the week was up one cent, or 0.3 per cent.

After tense jockeying between Washington and Beijing over the origins and handling of the novel coronavirus pandemic, top U.S. and Chinese trade representatives discussed the Phase One trade deal Thursday evening, with China saying it would work to meet agreed-upon purchases, including agricultural goods like corn and soybeans.

“If China’s going to ramp up the buying on Phase One because of Trump’s pressure, that’s gotta be bullish,” said Charlie Sernatinger, global head of grain futures at ED+F MAN Capital Markets.

Analysts remain skeptical that China, the world’s top soybean buyer, will meet targets, though the U.S. Department of Agriculture said on Friday that private exporters reported the sale of another 120,000 tonnes of soybeans to unknown destinations for delivery in the 2019-20 marketing year.

Traders are looking ahead to USDA’s world agricultural supply and demand (WASDE) report next Tuesday, which is expected to show stocks of wheat, corn and soybeans remain ample.

“This could be taking some stuff off the table ahead of WASDE. Not necessarily going long, but short covering,” said Joe Davis, director of commodity sales at Futures International.

Global wheat demand is likely to suffer as the coronavirus outbreak curbs travel, reducing sales at restaurants and bakeries around the world.

Worries about U.S. crop weather limited losses, as a cold snap across the Midwest could threaten newly planted corn and developing soft red winter wheat, according to meteorologists, while rain across Europe has strengthened its wheat crop.

Reporting for Reuters by Christopher Walljasper; additional reporting by Sybille de La Hamaide and Naveen Thukral.

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