Soybeans steady after two-week low, China trade fears cap gains

PARIS: Chicago soybean futures rose on Wednesday after hitting a two-week low in the previous session, although gains were checked by concerns over a prolonged trade dispute between Washington and Beijing.

Corn also firmed after a six-week low a day earlier, with adverse weather in South America lending some support to corn and soybeans.

Wheat also saw a bounce after a near two-week low on Tuesday.

A relatively upbeat reaction by financial markets to Wednesday's rejection by British lawmakers of a deal over Britain's exit from the European Union, also

helped underpin grains.

The most active soybean contract on the Chicago Board Of Trade were up 0.6 percent at $8.98-1/2 a bushel by the end of the overnight trading session.

"The soy complex is concerned by climatic issues in South America with dryness in Brazil and floods in Argentina," consultancy Agritel said in a note.

Thomson Reuters Agriculture Research on Wednesday lowered its forecast of Brazil's ongoing harvest by 2 percent to 118 million tonnes, joining other crop

watchers in factoring in the impact of dryness on yields.

The analyst unit also trimmed its Brazilian 2018/19 corn production outlook due to hot, dry weather in the south.

However, uncertainty over the outcome of trade talks between the United States and Beijing was hanging over grain markets, with doubts over whether a recent resumption in Chinese purchases of US soybeans would lead to normalised trade.

"If you look at the data, China has not been buying as much as I would have imagined. If the talks break down without an agreement, you would imagine this trend will only get worse," said Phin Ziebell, agribusiness economist at National Australia Bank.

US Trade Representative Robert Lighthizer did not see any progress made on structural issues in trade talks between Washington and Beijing last week, a US Senator said.

The most active CBOT corn futures rose 0.6 percent to $3.73-1/2 a bushel, while CBOT wheat added 0.6 percent to $5.14 a bushel.

A partial US government shutdown was also creating uncertainty in grain markets by depriving traders of data, notably export sales.