Soybeans hit more than two-week high on trade deal hopes

SINGAPORE/PARIS: Chicago soybeans climbed nearly 1 percent on Monday to their highest in more than two weeks as expectations of a trade agreement between Washington and Beijing underpinned the market.

The most-active soybean contract on the Chicago Board of Trade gained 0.9 percent to $9.18-1/2 a bushel by 1212 GMT after touching $9.21, its highest since Feb. 7.

Corn added 0.6 percent to $3.77-1/2 a bushel while wheat was down 0.2 percent at $4.90-3/4.

"China buying US beans in Brazil's soybean marketing season will increase competition in the market," one Singapore-based trader said.

US President Donald Trump on Sunday said he would delay an increase in US tariffs on Chinese goods thanks to "productive" trade talks and that he and Chinese President Xi Jinping would meet to seal a deal if progress continued.

China committed to buy an additional 10 million tonnes of US soybeans in a meeting in the Oval Office on Friday, US Agriculture Secretary Sonny Perdue said on Twitter.

The commitments are a "show of good faith by the Chinese" and "indications of more good news to come", Perdue wrote.

However, analysts warned that these commitments were also fragile.

"Nobody can predict how trade relations between the US and China will develop; any forecasts are mere conjecture," Commerzbank said in a note.

"The recent extension of the deadline for further US punitive tariffs, and China's commitment during the latest talks to buy another 10 million tons of soybeans (...) have much to do with political directive and little to do with normal business relations."

China's imports of US soybeans nearly doubled in January from the previous month, according to Chinese customs data released on Monday.

US corn and soybean stockpiles are projected to tighten by the end of the 2019/20 marketing year, the US Agriculture Department said on Friday.

The corn crop was seen rising 3 percent to 14.890 billion bushels, based on an average yield of 176.0 bushels per acre, the USDA said. Ending stocks for the 2019/20 crop year were pegged at 1.650 billion bushels, 5 percent lower than the previous marketing year.

For soybeans, the USDA estimated the crop at 4.175 billion bushels, 8 percent lower than 2018. Ending stocks were seen falling to 845 million bushels, a figure the USDA said was "historically high" but still down 65 million bushels from a year earlier.