Chicago | Reuters – U.S. soybean futures rose nearly 4 percent on Thursday on hopes for easing tensions between the United States and China after President Donald Trump said trade talks with Beijing were “moving along nicely”.
Corn and wheat also firmed, following soybeans and as the U.S. dollar weakened, making purchases of U.S. shipments less expensive for buyers holding other currencies.
Trump’s comments in a post on Twitter ignited the rally, reversing earlier weakness stemming from sluggish corn and soybean export sales and worries about swelling soybean supplies as the U.S.-China trade war has dragged down demand. Both countries have placed tariffs on some of each other’s imports.
“All we’ve heard from Trump in the last three or four months has been more tariffs, more tariffs. This is the first time we’re hearing about progress and it’s coming from the highest level,” said Ted Seifried, chief agriculture market strategist for brokerage Zaner Group in Chicago.
Trump said that, after a “very good” talk with Chinese President Xi Jinping, trade discussions were “moving along nicely” and that the two leaders would meet to discuss trade at the G-20 summit in Argentina this month.
Chicago Board of Trade January soybeans ended up 30-1/4 cents, or 3.6 percent, at $8.83-3/4 a bushel by 11:54 a.m. CDT (1654 GMT) in the steepest rally in nearly four months. Buying accelerated as the contract broke through chart resistance at its 10-, 20-, 50- and 100-day moving averages.
CBOT December corn rose 3-1/2 cents to $3.66-3/4 a bushel, while CBOT December wheat gained 7-1/2 cents to $5.08 a bushel.
Prices had been pressured by sluggish corn and soybean export sales in weekly U.S. Department of Agriculture data.
Net corn export sales last week totalled less than 400,000 tonnes for the third straight week while net soybean sales totalled just 455,807 tonnes, compared with nearly 2 million tonnes in the same week last year, USDA data showed.
Net wheat export sales, however, topped trade expectations at 582,545 tonnes, including 50,000 tonnes to Egypt.
U.S. wheat exports have struggled recently amid hot competition for global business, especially from Russia. But a surge in Black Sea region exports after a poor harvest has led to expectations Russian sales will slacken.
“Wheat is being supported by the hope that the poor harvests in several global exporting regions will transfer world purchasing demand to the United States,” said Charles Clack, agricultural commodity analyst at Rabobank.
– Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.