U.S. grains: Soy declines, corn firms as China deal’s terms awaited


By Julie Ingwersen, Reuters

via Canadian Cattlemen - January 13, 2020


Chicago | Reuters — U.S. soybean futures declined on Monday on favourable crop weather in South America and position-squaring as traders waited to see if a U.S.-Chinese trade agreement due to be signed this week will herald a significant increase in demand for U.S. crops.


Wheat futures also fell, down from multi-month highs set last week, while corn futures rose, with the most-active March contract reaching a one-week top as brokers covered short positions.


Chicago Board of Trade March soybean futures settled down 3-3/4 cents at $9.42-1/4 per bushel. March wheat ended down 2-1/4 cents at $5.62-1/4, and March corn finished up 3-3/4 cents at $3.89-1/2 a bushel.


China’s Vice Premier Liu He will visit Washington to sign the so-called Phase One trade accord with the United States, with a ceremony scheduled for Wednesday.


The agreement, first announced a month ago, helped CBOT soybeans rally to their highest since June 2018 at the start of January as it raised hopes that China, the world’s biggest soybean importer, would revive imports of U.S. supplies.


U.S. Treasury Secretary Steven Mnuchin on Sunday reiterated Washington’s position that China has committed to increase purchases of U.S. agricultural products to $40 billion-$50 billion annually. But a lack of detail on the accord has made some traders cautious.


“It’s ‘wait-and-see’ until Wednesday, and we see what the trade agreement brings to the market. In the meantime, we are not doing much of anything. There is not a lot of trade (and) volumes are light,” said Terry Linn, analyst with Linn and Associates, a Chicago brokerage.


Beneficial weekend rains in Brazil’s crop belt weighed on CBOT futures by fueling expectations of a large South American soy harvest, Linn said, adding that Brazil’s currency hit a one-month low, encouraging Brazilian farmers to sell dollar-denominated soybeans.


“You’ve got some negative things in background, but the Phase One trade deal is giving some underlying support,” Linn said...