Soybeans, corn up on technicals, US-China trade optimism

CHICAGO: US soybean futures rose more than 1 percent on Tuesday, rebounding off a near three-week low on technical buying and optimism about prospects for a US trade agreement with China, the world's top soybean buyer, analysts said.

Corn futures bounced from a four-week low and wheat followed the firm trend, although trade was choppy.

As of 12:43 p.m. CST (1843 GMT), Chicago Board of Trade March soybeans were up 12 cents at $9.17 per bushel. March corn was up 5 cents at $3.77-3/4 a bushel while March wheat was up 1-1/4 cents at $5.19-1/2 a bushel.

Traders noted broad strength in commodity and equity markets after US lawmakers reached a tentative deal to avoid another partial government shutdown, and on hopes of an agreement during the ongoing US-China trade talks.

"This has more to do with today's broader optimism related to the (trade) talks, some fresh buying on yesterday's breaks and momentum traders doing what they do," INTL FCStone chief commodity analyst Arlan Suderman said in a note to clients.

CBOT March soybeans dipped to $9.03-1/2 a bushel on Monday, the contract's lowest since Jan. 22, before rallying Tuesday and pushing through resistance at its 50- and 200-day moving averages.

"The bean market got down against $9 (per bushel), which is the psychological line in the sand. Then you bounced and ran some stops as you started to take out these moving averages," said Terry Linn, analyst with Chicago-based brokerage Linn & Associates.

"I don't see any news in terms of talks in China, as far as any specifics ... but I think there is a sense of optimism that maybe you will get something done," Linn said.

Top US officials arrived in the Chinese capital on Tuesday ahead of high-level trade talks as the world's two largest economies attempt to hammer out a deal ahead of a March 1 deadline and avoid another escalation of tariffs.

US President Donald Trump said that he could see letting the March 1 deadline slide a little, but that he would prefer not to and expects to meet with Chinese President Xi Jinping to close the deal at some point.

If the two sides cannot reach a deal by March 1, US tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25 percent from 10 percent. China would likely respond by raising tariffs on $60 billion worth of U.S goods that it announced last year in retaliation.