China sales hopes lift soy, wheat sinks on demand worry

CHICAGO: US soybean futures inched higher for a fourth straight session on Wednesday in light trading as investors sought clues as to whether a truce between Washington and Beijing in their trade dispute would revive U.S. soybean sales to China.

Corn, which could also benefit from renewed Chinese demand, also firmed. But wheat retreated for the first time in four sessions, pressured by concerns about weak demand for U.S. shipments.

Trading in grains was light overall as other markets, including U.S. equities and bond markets, were closed on Wednesday in observance of the death of former U.S. President George H.W. Bush.

China expressed confidence on Wednesday that it can reach a trade deal with the United States, a sentiment echoed by U.S. President Donald Trump a day after he warned of more tariffs if the two sides could not resolve their differences.

"The market expects a better agreement to be reached with China at some point. But there are really no details out there that they are going to start buying bushels any time soon and that's left us with very limited buying interest," said Brian Hoops, president U.S.-based brokerage Midwest Market Solutions.

"The wheat market's focused on demand and the demand has been very soft," Hoops said.

Chicago Board of Trade January soybeans were up 3-1/4 cents at $9.15 a bushel at 11:53 a.m. CST (1753 GMT) while March corn was a penny higher at $3.85-1/2 a bushel. CBOT March wheat fell 4 cents to $5.18-1/2 a bushel.

Rising forecasts for Brazil's upcoming soybean harvest also curbed prices as bumper supplies from the world's biggest soybean exporter could reduce China's need for U.S. beans.

Analysts polled ahead of a monthly U.S. Department of Agriculture report next week pegged Brazil's 2018/19 soybean crop at 120.88 million tonnes, up slightly from the agency's prior-month view.

Brazilian consultancy Celeres said the next harvest could approach 130 million tonnes.

Wheat prices remain anchored by global demand concerns, including from top importer Egypt. The country has not issued letters of credit covering 16 recently purchased cargoes, effectively delaying payment and causing confusion among suppliers, sources familiar with the matter told Reuters on Wednesday.

The cargoes included one of U.S. wheat, a sale that had raised hopes U.S. shipments would accelerate as supplies in top wheat exporter Russia dwindled.