Soybeans at new 2-year peak on China sales, corn at 6-month high

PARIS/SINGAPORE: Chicago soybean futures resumed a recent rally to hit a new two-year high on Friday as a run of export sales to China continued ahead of a US government crop report expected to show a reduced outlook for the upcoming US harvest.

Corn extended gains to touch a near six-month peak as a case of African swine fever in Germany raised the prospects of increased demand for US pork and feed grains like corn and soy used to feed pigs.

Wheat edged higher too, finding further support in a flurry of tenders by importing countries.

Price movements were limited as grain markets were waiting for the US Department of Agriculture's (USDA) monthly supply and demand report at 1600 GMT, expected to include reduced forecasts for US corn and soybean harvests due to storm and dry weather damage.

The most-active soybean contract on the Chicago Board Of Trade was up 0.5% at $9.82-1/2 a bushel, as of 1127 GMT, after earlier rising to $9.87-1/2, the latest in a series of highs since June 2018.

It was heading for a fifth straight weekly gain.

The USDA on Thursday reported that exporters had sold 195,000 tonnes of soybeans to China, and traders were watching for the agency's weekly US grain export report at 1230 GMT for further clues on Chinese demand.

"Chinese demand is strong across the grains complex at present," said Phin Ziebell, agribusiness economist at National Australia Bank.

"I think the big question is whether there is something bigger going on regarding China's food balances."

CBOT corn was up 0.6% at $3.67 a bushel after earlier reaching its highest since March 13 at $3.68-1/2. CBOT wheat was 0.4% higher at $5.50-1/4.

Thursday's confirmation of a case of African swine fever in a wild boar in Germany, the European Union's biggest pork producer, led South Korea to ban imports of German pork and raised expectations China could follow suit.

"Given Germany's exports, this outbreak could have major consequences for the balance of international markets," France's main pork wholesale market MPB said in a note.