Soybeans bounce off two-week low on US-China trade hopes

• US soybean futures inched up on Monday, rising off a two-week low touched on Friday.
• The dominant issue of the day is the US harvest and that's acting as an anchor on the market.
• The Chicago Board of Trade's most active soybean contract  on Monday closed up 0.19% at $9.20-3/4 a bushel.

CHICAGO: US soybean futures inched up on Monday, rising off a two-week low touched on Friday on hopes for progress in trade talks between Washington and Beijing to settle a conflict that has heavily reduced US agricultural exports to China.

Meanwhile, corn and wheat futures slipped on expectations a US Department of Agriculture (USDA) report later on Monday could give a positive picture of US crop conditions and harvest progress.

"The dominant issue of the day is the US harvest and that's acting as an anchor on the market," said Don Roose, president of US Commodities in West Des Moines, Iowa.

The Chicago Board of Trade's most active soybean contract  on Monday closed up 0.19% at $9.20-3/4 a bushel, having fallen more than 1% on Friday when it touched a two-week low of $9.19-1/2 a bushel.

US and Chinese officials are "close to finalising" some parts of a trade agreement after high-level telephone discussions on Friday, the US Trade Representative's office and China's Commerce Ministry said, with talks to continue.

Traders said they also were watching forecasts of generally dry weather across parts of the US grain belt, which could help with the harvest.

Markets were awaiting the weekly crop progress report from the USDA on Monday, expecting news of good progress with US corn and soybean harvests.

"An outlook for favourable weather across key producing areas holds gains in check and allows farmers a chance to rapidly advance harvesting," brokerage Allendale said in a note.

Grain that has been pre-sold by farmers is hitting the market, Roose said. But amid lackluster demand and less than stellar prices, farmers are increasingly opting to store their grain after harvest - instead of selling it off the combine this fall.

Corn closed the day down 0.78% at $3.84 a bushel, having closed unchanged on Friday. Wheat fell 0.97% to $5.11-3/4 a bushel.

Wheat and corn both fell partly on concern about sluggish US exports, said commodities broker Craig Turner at Daniels Trading.

"US exports for wheat are better than corn - and I can't remember the last time I've seen that," Turner said. "I don't think it means that the market is bullish for US wheat. I think it says that the demand for US corn just isn't there."

Analysts also noted uncertainty surrounding any potential change to Argentina's grain and soybean export tax policy after the election of Alberto Fernandez as the country's next president.