CHICAGO: US soybean futures hit a 4-1/2-month high on Wednesday as China bought US soybeans for the first time since
CHICAGO: US soybean futures hit a 4-1/2-month high on Wednesday as China bought US soybeans for the first time since US President Donald Trump and his Chinese counterpart Xi Jinping met in early December.
State-owned Chinese companies bought at least 500,000 tonnes of US soybeans, two US traders said, in deals valued at more than $180 million.
But the market pared gains as news of the sale removed some of the uncertainty that had supported futures in recent days as rumors swirled about more imminent Chinese purchases.
"The headline risk is waning, and that has got people taking profits," said Dan Basse, president of AgResource Co.
"When people in the cash market started to hear that China was buying, we started to worry less about politics and more about the balance sheet," Basse said, alluding to massive US soybean inventories and prospects for a record-large harvest in South America in the next few months.
As of 12:09 p.m. CST (1809 GMT), the Chicago Board of Trade (CBOT) January soybean contract was up 3-3/4 cents at $9.18-3/4 a bushel after reaching $9.28, its highest since July 31, and the highest for a most-active contract since June 15.
CBOT March wheat was up 7 cents at $5.28 a bushel and March corn was up 1/4 cent at $3.85 a bushel.
Soybeans got an early boost after Trump said China was back in the market buying US beans. Trump told Reuters on Tuesday that China was buying a "tremendous amount" of US soybeans and that trade talks with Beijing were already under way by telephone, with more meetings likely among US and Chinese officials.
One export trader with direct knowledge of the latest deals said Chinese state-owned firms bought at least 12 US soybean cargoes for shipment between January and March.
China is the largest buyer of US soy, importing about 60 percent of all US overseas shipments last year in deals valued at more than $12 billion. But the world's top importer has purchased little since Beijing slapped steep tariffs on US shipments on July 6 in retaliation for duties on Chinese goods.
As soybeans firmed, CBOT March wheat rose more than 1 percent on technical buying and signs of rising global prices.
Egypt's state grain buyer, the General Authority for Supply Commodities, bought 180,000 tonnes of Russian and Romanian wheat in an international purchasing tender.
The purchase prices, at about $256 to $259 per tonne including freight, were up about $4 to $6 from what Egypt's GASC paid in its previous tender on Dec. 6.
"The GASC tender, with world prices being up, has got people's attention," Basse said.