Markets

Soybeans fall on worries about US-China trade talks

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Chicago Board of Trade March soybeans were down 0.2 percent at $9.21 a bushel at 1204 GMT.

March wheat rose 0.4 percent to $5.21 a bushel. March corn rose 0.2 percent to $3.80-1/4 a bushel.

"The outcome of the US/China trade talks is hugely important for US soybean exports to China and markets are nervous about any signs of increased political tension which could make any agreement more difficult," said Charles Clack, agricultural commodity analyst at Rabobank.

"Markets are also watching the impact of unfavourable soybean crop weather in parts of South America, especially Brazil and Argentina. Reduced South American soybean crops could transfer more export sales to the US"

US Treasury Secretary Steven Mnuchin said the United States expects to make significant progress this week in trade talks in Washington with Chinese Vice Premier Liu He, who will later see President Donald Trump.

But there is concern talks could be threatened by the United States announcing criminal charges against Chinese telecoms group Huawei.

Weather damage to South American soybean crops remained in focus.

"Grain markets remained in tight trading ranges on concerns that adverse weather in Brazil will lead to more harvest forecast cuts," brokerage Allendale said.

Russian wheat export prices rose last week, raising hopes Russia's domination of export markets will decline.

"Wheat and corn are underpinned by the positive export outlook for US supplies," said Rabobank's Clack. "Russian wheat prices are rising which is making the US look more competitive. We could see an early illustration of this in the international tender to buy wheat from Egypt's GASC today."

"US wheat was offered at the lowest price in GASC's last tender on Jan. 9 but lost out because of higher ocean shipping costs from the US Now we are waiting to see if rising Russian prices will transfer more export sales to the US"

"US corn is also looking competitive in export markets. The US weekly export figures are due on Thursday which could throw light on the recent US export performance of both corn and wheat."

Following the partial US government shutdown, the US Department of Agriculture (USDA) plans to release several key grain reports on Feb. 8.

But dealers are also anxiously awaiting the USDA to restart its publication of spot news about US export sales deals.

Copyright Reuters, 2019