Soy dips on US-China trade worry after tepid USDA data

CHICAGO: US soybean futures drifted lower on Friday and were on pace for a second straight weekly decline after the US Department of Agriculture (USDA) projected record large US soy stocks amid a still-unresolved trade dispute with top importer China.

Corn also eased after the USDA released a flood of data on Friday, some of it delayed by the recent government shutdown, showing plentiful supplies and lighter US domestic demand, and large upcoming harvests in South America.

Wheat slipped from earlier highs despite USDA's lower-than-expected winter crop acreage estimate as the agency said global supplies of the grain remain abundant.

Given the lack of major surprises in the USDA data, grain markets continued to struggle to break out of recent trading ranges. Traders remained cautious amid uncertainty over a US trade deal with China and moderating crop weather in Brazil and Argentina.

"We're right to be back to watching progress on trade talks and South American weather," said Terry Reilly, senior commodities analyst with Futures International.

Thursday's news that US President Donald Trump and China's Xi Jinping are unlikely to meet before a March 1 negotiating deadline dampened hopes of a breakthrough in trade talks before a March 1 deadline when US tariffs on Chinese goods are set to rise.

The two sides will hold talks in Beijing next week, with deputy-level meetings to start on Monday and high-level talks to follow, a White House spokeswoman said on Friday.

Chicago Board of Trade (CBOT) March soybeans were down 1/4 cent at $9.13 a bushel by 12:41 p.m. CST (1841 GMT), poised for a weekly drop of about 0.5 percent.

March corn was 2 cents lower at $3.74-1/2 a bushel and on pace for a third straight weekly decline.

CBOT March wheat was up 4-1/2 cents at $5.17-3/4 a bushel but lower in the week after a steep decline in the prior session.

The USDA projected US winter wheat acres at the lowest in 110 years following years of expanding global production.

Wheat futures also drew some support from improving export demand after top importer Egypt bought two cargoes of US soft red winter wheat in a snap tender.