Soybeans firm as USDA confirms large purchases by China

CHICAGO: US soybean futures edged higher for a third straight session on Tuesday after the U.S. Department of Agriculture confirmed more soybean purchases by China.

The USDA reported nearly 3 million tonnes of U.S. soybean export sales on Tuesday, mostly to China, after high-level talks last week between the United States and China ended with a vow by Beijing to buy 5 million tonnes of U.S. soybeans.

Corn prices firmed and wheat ended mixed as traders squared positions ahead of the announcement of a backlog of USDA crop reports on Friday that were delayed by the partial U.S. government shutdown.

"The soybean sales were already baked in and now we're looking forward to any news in the crop report coming up on Friday. After that we're looking for what happens with the upcoming Trump-Xi meeting. It's a market that's just handcuffed right now," said Don Roose, president of U.S. Commodities.

Chicago Board of Trade March soybean futures were 1-3/4 cents higher at $9.20-1/4 a bushel, March corn was up 1-1/2 cents at $3.80-3/4 a bushel and CBOT March wheat rose 1-1/2 cents to $5.27-1/4 a bushel.

Traders are hopeful that progress is possible in talks to end the U.S.-China trade war, which has hugely cut U.S. soybean exports to China.

Friday's USDA data will include wheat sowings, U.S. and South American corn and soybean production, U.S. grain stocks and world crop season ending stocks.

Grain traders are also monitoring weather in South America, following hot and dry conditions in parts of Brazil this season and overly wet weather in Argentina that have dented yield prospects. Weather conditions in both countries are improving, forecasters said.

Brazil's soy harvest in the second-largest producing state of Paraná is well ahead of last season, with limited damage to the fields from a drought in December, state agricultural research body Deral said on Tuesday.