Soybeans edge upward, still awaiting promised Chinese buying

CHICAGO: US soybean futures edged higher on Tuesday on hopes that a U.S.-China trade war truce over the weekend would result in fresh Chinese demand for U.S. soybeans, although no deals have been confirmed.

Corn also firmed slightly, following soybeans, while wheat ended mixed on light demand.

At Saturday's Group of 20 meeting in Argentina, U.S. President Donald Trump agreed to postpone new tariffs during a  90-day truce, while his Chinese counterpart pledged to purchase more agricultural products from U.S. farmers immediately.

However, China will need to lift tariffs it imposed on U.S. farm products, including soybeans, before it can realistically buy substantial volumes of U.S. goods.

"The market's taking a wait-and-see approach with China," said Jim Gerlach, president of A/C Trading.

Chicago Board of Trade January soybeans ended up 6 cents at $9.11-3/4 a bushel, well off of a four-month high notched on Monday in response to the truce.

Trump on Tuesday held out the possibility of extending the truce but warned he would revert to tariffs if the two sides could not resolve their differences.

Soybean futures also remain anchored by ample U.S. supplies and a massive Brazilian harvest due in early 2019 that would make it more difficult for U.S. shipments to compete in the export market.

Agribusiness consultancy Céleres said Tuesday that Brazilian farmers may produce 123 million to 130 million tonnes of soybeans in the 2018/19 crop cycle, a record volume, and that benchmark prices were not likely to surpass $9 per bushel in 2019.

CBOT March corn futures were up 2-3/4 cents at $3.84-3/4 a bushel, while CBOT March wheat was up 1-1/4 cents at $5.22-1/2 a bushel.

Wheat has been supported recently by hopes that Russian export supplies will sell out after big sales this year and that export demand will be transferred to the United States. But Russian grain continues to undercut U.S. prices.

Russian wheat was the cheapest in a Bangladesh tender on Tuesday.