Markets

Soy firm on Brazil dryness, US-China trade talk hopes

Published Updated

Corn and wheat eased as some traders sold contracts to take profits from recent highs.

Soybean prices were underpinned by news of a third wave of large US soybean purchases by China on Monday. Also, officials from Washington and Beijing were meeting for two days of talks this week aimed at resolving a bitter trade fight.

US Commerce Secretary Wilbur Ross predicted Beijing and Washington could reach a trade deal that "we can live with."

Adverse crop weather in South America offered further support to prices.

"There are some weather concerns creeping into the market," said Ted Seifried, chief market strategist for Chicago-based Zaner Ag Hedge.

"Soybeans have been climbing based on the idea that it is too dry in a good portion of Brazil and too wet in part of Argentina," he said.

Consultancy INTL FCStone cut its estimate of Brazil's soybean crop on Friday by about 4 million tonnes to 116.25 million tonnes due to a drought affecting some areas.

Chicago Board of Trade March soybeans rose 2-3/4 cents to $9.24-1/4 a bushel after touching a 3-1/2 week peak of $9.27-3/4.

CBOT March corn fell 3/4 cent to $3.82-1/4 a bushel and March wheat shed 1/4 cent to $5.16-3/4 a bushel.

The US Department of Agriculture (USDA) delayed several major domestic and world crop reports because of the two-week-old partial government shutdown, the agency said on Friday.

New release dates for the monthly World Agricultural Supply and Demand Estimates report and other data originally scheduled for Friday, Jan. 11 will be set once government funding is restored, USDA said.

The agency released weekly export inspections data on Monday. Corn and wheat inspections fell short of trade expectations, while soybeans were within estimates.

The wheat market was awaiting the outcome of a tender issued by major importer Algeria.

News that a cargo of Argentine wheat sold to Algeria had been rejected fuelled speculation about quality problems, although the country's wheat industry association said it was an isolated case.

Argentine wheat competes with European Union and US wheat to supply Algeria, one of the few import markets where top supplier Russia is not present.

Copyright Reuters, 2019