CHICAGO: US soybean futures surged 3 percent on Tuesday to 1-1/2-month highs on hopes that the United States and China would restart stalled talks to avert a damaging trade war that has already slowed US soy exports.
Corn and wheat climbed along with soybeans, drawing additional support from concerns about weather-reduced harvests in key production areas around the world.
Soybeans led grain markets higher after a news media report that US and Chinese government representatives were trying to revive trade negotiations ahead of another round of US tariffs on Chinese goods. The report, which has not been verified by Reuters, also buoyed equities markets.
The White House, the US Department of the Treasury and the Office of the US Trade Representative declined to comment on the report.
“The idea that the US and China are trying to restart talks … the market’s having a positive response today that there’s maybe a ray of light,” said Ted Seifried, chief agriculture market strategist for broker Zaner Group in Chicago.
China has imposed retaliatory tariffs on US soybeans, dairy, meat, produce and liquor after Washington put duties on Chinese goods.
US Treasury Secretary Steven Mnuchin has said he was ready to restart talks if China was prepared to make “meaningful changes” to its trade and technology transfer policies.
A public comment period on proposed 25 percent tariffs on another round of $16 billion in Chinese goods ends on Tuesday, but it will likely take several weeks before a final list of tariff targets is published, a USTR spokeswoman said.
Chicago Board of Trade November soybean futures jumped 28 cents, or 3 percent, to $9.19 a bushel, the highest close since June 18.
CBOT September corn notched a fresh 1-1/2-month high, gaining 5 cents, or 1.4 percent, to $3.72-1/4 a bushel. CBOT September wheat was up 7-1/4 cents at a two-month high of $5.53-3/4 a bushel.
Concerns about weather-reduced crops also underpinned grain markets. Forecasters have cut wheat harvest expectations for Russia, the European Union and Australia due to adverse weather, while prolonged dryness in parts of the US Midwest has likely dragged down yield potential for corn and soybean crops.
However, crop condition ratings for US corn and soybeans have topped trade expectations for two consecutive weeks. The US Department of Agriculture left its good-to-excellent ratings for both crops unchanged in the latest week. Analysts had expected a slight decline.
Source: Brecorder
