Soybeans at 1-year high on trade hopes, corn extends losses

SINGAPORE/PARIS: Chicago soybean futures rose for a second session on Monday to a one-year high as a thaw in US-China trade relations following talks between the two nations underpinned the market.

Corn extended Friday's deep losses after the US Department of Agriculture (USDA) pegged US planted acres well above trade expectations.

The most-active soybean contract on the Chicago Board of Trade rose 0.2% to $9.24-1/4 a bushel by 1125 GMT after marking its highest since June 2018 at $9.34 a bushel.

Corn shed 0.35% at $4.3 a bushel, while wheat slid 0.8% to $5.23-1/4 a bushel.

The United States and China agreed on Saturday to restart trade talks after President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei in order to reduce tensions with Beijing.

However, China and the United States will face a long road before they can reach a deal to end their bitter trade war, with more fights ahead likely, Chinese state media said after the two countries' presidents held ice-breaking talks in Japan.

"Trade relations between the two economic behemoths are not going get worse for now," said Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia.

"Nonetheless agreeing to talk is both the minimum and maximum expected from last weekend. And it is easy to agree to talk. The tougher part is the talk creating compromises that lead to agreement."

The corn market has come under pressure after the US Department of Agriculture (USDA) put US planted acres well above trade expectations despite rains and flooding this spring that disrupted sowing.

In its annual acreage report on Friday, the USDA said US farmers seeded 91.7 million acres of corn and 80.0 million acres of soybeans. This compares with the government's March forecasts of 92.8 million corn acres and 84.6 million soybean acres.

Corn futures dropped despite widespread belief the actual acreage figure was considerably lower and could be amended at next report on Aug. 12.

"It must be considered that these figures are the outcome of a poll realized during the first fortnight of June, at a period where late plantings could still be achieved in a context of a very favourable price ratio in favour of the corn compared to the soybean," Agritel consultancy said in a note.

Large speculators raised their net long position in CBOT corn futures in the week to June 25, regulatory data released on Friday showed.

The Commodity Futures Trading Commission's weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and trimmed their net short position in soybeans.