Soybeans pause after rally as US elections, crop data loom

PARIS/SINGAPORE: Chicago soybeans slipped on Monday, after reaching a two-month high in the previous session, as investors assessed the chances of a trade deal between Washington and Beijing while bracing for US midterm elections and government crop data.

Corn ticked higher to touch a new two-week high, while wheat inched lower.

"Traders remain cautious about the improved relations between the US and China on trade," consultancy Agritel said in a note.

"The start of the week should be quiet before the results of the US elections and the USDA report this Thursday."

US voters go to the polls on Tuesday in congressional elections while grain markets are also turning their attention towards Thursday's US Department of Agriculture world crop report, which will include updated estimates for the US corn and soybean harvests.

Expectations for downward revisions to the USDA's forecasts of corn and soybean yields have also lent support to prices.

Soybeans rallied last week after a phone call between US President Donald Trump and Chinese President Xi Jinping fuelled hopes that a trade dispute between the world's two largest economies may be resolved.

But comments by Trump that a trade deal was likely were followed by cautious remarks from his economic adviser Larry Kudlow, who said he was less optimistic than he was previously about a deal.

China is the world's biggest soybean importer and its intake of US supplies has dried up after Beijing imposed extra tariffs as part of its dispute with Washington.

The USDA's attache in China has forecast the country's soybean imports will drop sharply in 2018/19 to 85 million tonnes due to the effects of the trade tussle, well below the USDA's current official projection of 94 million tonnes.

The most-active soybean contract on the Chicago Board Of Trade was down 0.1 percent at $8.88-3/4 a bushel by 1321 GMT. On Friday it reached its highest since Aug. 20 at $9.00-3/4 but failed to hold above the $9 threshold.

CBOT corn was up 0.5 percent at $3.73 a bushel, close to an earlier two-week high of $3.73-3/4, while wheat ticked down 0.2 percent to $5.08 a bushel.

In separate data released on Friday, the USDA forecast that US farmers would likely expand plantings of both corn and wheat while reducing soybean and cotton seedings for the upcoming marketing year.