Soy­beans tick up, eyes on US-China trade talks

The Financial Daily - - NATIONAL -

HAM­BURG: Chicago soy­bean fu­tures were slightly firmer on Tues­day, with at­ten­tion on whether trade talks be­tween Wash­ing­ton and Bei­jing will open the door for more US soy­bean ex­ports to China.

"Soy­bean mar­kets are paus­ing to see what re­sults the trade talks be­tween the US and China ac­tu­ally bring while there is also at­ten­tion on un­favourable crop weather in Brazil," said Matt Am­mer­mann, com­mod­ity risk man­ager with INTL FCS­tone. "Wheat and corn are see­ing sup­port from US ex­port hopes."

Chicago Board of Trade March soy­beans were up 0.1 per­cent at $9.25-1/2 a bushel at 1202 GMT after touch­ing a 3-1/2 week high on Mon­day.

March wheat rose 0.4 per­cent to $5.19-1/4 a bushel. March corn rose 0.4 per­cent to $3.84 a bushel.

US Com­merce Sec­re­tary Wil­bur Ross pre­dicted on Mon­day that Bei­jing and Wash­ing­ton could reach a trade deal that "we can live with" as the two coun­tries re­sumed talks about a dis­pute which has slashed US soy­bean ex­ports to China.

Chi­nese state firms bought at least three car­goes of US soy­beans or about 180,000 tonnes on Mon­day, traders said. One said the to­tal was closer to 900,000 tonnes.

"The key is whether ne­go­ti­a­tions will re­open the door for more US soy­bean ex­ports to China," Am­mer­mann said. "There were re­ports on Mon­day that China has been buy­ing US soy­beans again."

"But the US gov­ern­ment shut­down means that USDA (US Depart­ment of Agri­cul­ture) ex­port sales are not be­ing an­nounced."

"US mar­kets are used to be­ing given rapid and pre­cise data on ex­port sales. Now the con­cern is that if China has been buy­ing US soy­beans, we could get a big wave of ex­port sales data when the gov­ern­ment shut­down ends."

The soy­bean mar­ket wants to see a "pos­i­tive out­come" from the trade talks be­fore gain­ing fur­ther or sus­tain­ing re­cent price gains, said Phin Ziebell, agribusi­ness econ­o­mist at Na­tional Aus­tralia Bank.

Grow­ing hopes of more US ex­port sales were also un­der­pin­ning wheat and corn.

"Rus­sian wheat is now get­ting more ex­pen­sive fol­low­ing the coun­try's ex­port surge in re­cent months. Rus­sia was the cheapest

wheat in the world but that has changed," Am­mer­mann said.

There is also a ma­jor pur­chase ten­der in the mar­ket from Al­ge­ria but this is likely to be largely French busi­ness.

"There is chat­ter that China could buy US corn if trade talks are suc­cess­ful but no con­fir­ma­tion," Am­mer­mann said. "Ukrainian corn is also look­ing more ex­pen­sive than US sup­plies."

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