Soybean trading subdued as market waits for China purchases

PARIS/SINGAPORE: Chicago soybean futures edged lower on Thursday as optimism over trade talks between US and Chinese officials this week was tempered by a lack of signs that China was continuing to buy soybeans or other US crops.

Soybean prices were underpinned by hopes that the trade negotiations will lead to more Chinese purchases of US supplies, as well as declining expectations for Brazil's harvest following dry weather.

US Wheat gave back some of the gains of the last two days, with a clean sweep for Russian wheat in an import tender held by Egypt on Wednesday and the absence of Chinese purchases of US cereals cooling export sentiment.

Corn was flat.

"Beans are under a bit of pressure after gaining ground in the last session on hopes of China making further purchases," said Phin Ziebell, agribusiness economist at National Australia Bank.

"The market is keen to see Chinese purchases actually take place before any further gains."

The most-active soybean contract on the Chicago Board Of Trade had ticked down 0.1 percent to $9.23 a bushel by 1227 GMT.

China's commerce ministry said on Thursday this week's trade talks were extensive and detailed, while the US Trade Representative's office said on Wednesday that China had pledged to purchase "a substantial amount" of US agricultural, energy and manufactured goods and services.

However, grain markets were still seeking evidence of more Chinese demand, after several purchases of US soybeans by China in the past month as part of a 90-day truce agreed by US President Donald Trump and Chinese counterpart Xi Jinping in their countries' tariff dispute.

In Brazil, statistics agency Conab cut its estimate of the 2018/19 soybean harvest that is underway to 118.8 million tonnes from 120.1 million in December, joining other forecasters who have lowered their outlook due to dry weather.

"Brazil corn and soybeans (are) feeling the impact of drought," Thomson Reuters Agriculture Research analysts said in a note. "Further downside is likely as hot and dry weather looks set to continue."

CBOT wheat dipped 0.3 percent to $5.18-1/2 a bushel, while corn was unchanged on the day at $3.82 a bushel.

Egypt's state grain buyer bought 415,000 tonnes of Russian wheat in an import tender on Wednesday, countering recent expectations that Russia was becoming uncompetitive overseas after a brisk first half of its export season.

In France, which like the United States has been expected to benefit from easing Russian exports, the country's farming agency on Wednesday trimmed its forecast for wheat exports outside the EU this season, cautioning that competition would continue to be tough.