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U.S. grains: Soybeans firm on Chinese trade prospects

Soy, corn anchored by accelerating U.S. harvest

Chicago | Reuters — U.S. soybean futures firmed on Tuesday on hopes of fresh export sales to China after Beijing gave major crushers waivers to import U.S. soybeans without retaliatory tariffs.

Futures, however, drifted from early highs as new export deals failed to materialize and as farmers took advantage of the price spike to sell crops, flooding the market with newly harvested soybeans.

China on Tuesday offered 10 million tonnes of tariff-free quota to state and privately owned crushers and to major international trading houses with crushing plants in China at a meeting called by the state planner, according to sources that were briefed on the matter.

The news lifted Chicago Board of Trade (CBOT) November soybeans to within 1/4 cent of last week’s peak, which was the highest point for a most-active contract since the start of the U.S.-China trade war more than 15 months ago.

“We started off with a bang on the idea that China would allow up to an additional 10 million tonnes (of U.S. soybeans) tariff free,” said Ted Seifried, chief market strategist for Zaner Ag Hedge in Chicago.

“But we’re right in the thick of harvest and a lot of farmers are selling cash beans,” he said.

CBOT November soybeans ended 3/4 cent higher at $9.34 a bushel after peaking at $9.45-1/4 in the session (all figures US$).

Prices were also anchored by an accelerating U.S. harvest, with 46 per cent of the crop gathered as of Sunday, according to the U.S. Department of Agriculture.

Corn futures were flat on Tuesday, underpinned by a slower-than-expected harvest and concerns about lower yields in some areas, but capped by weak export demand.

U.S. corn was 30 per cent harvested as of Sunday, up from 22 per cent the previous week but below trade expectations for 34 per cent.

CBOT December corn was 3/4 cent higher at $3.88 a bushel after touching a 1-1/2 week low of $3.85.

Forecasts for normal to below-normal precipitation for a large part of the U.S. farm belt over the next two weeks should allow for more active harvesting in most areas.

Wheat futures retreated on profit-taking following recent multi-month highs, although the market remained underpinned by rising prices in Russia and concerns over the Australian and Argentine harvests.

CBOT December wheat fell 5-1/2 cents to $5.18 a bushel.

— Karl Plume reports on agriculture and ag commodities for Reuters from Chicago; additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore.

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