January 4, 2019 / 10:32 PM / a year ago

GRAINS-Soybeans notch 2-week high as U.S.-China talks fuel export hopes

 (Updates with closing U.S. prices)
    By Julie Ingwersen
    CHICAGO, Jan 4 (Reuters) - U.S. soybean futures climbed to a
two-week high on Friday on optimism over U.S.-China trade talks
planned for next week, coupled with declining estimates of the
size of Brazil's developing crop, traders said.
    Corn and wheat followed the firm trend, with brightening
export prospects for both grains lending support.
    Chicago Board of Trade March soybeans settled up 8-3/4
cents at $9.21-1/2 a bushel after reaching $9.22-1/2, the
contract's highest since Dec. 19.
    CBOT March corn ended up 3-1/4 cents at $3.83 a bushel and
March wheat rose 3-1/4 cents at $5.17 a bushel.
    Soybeans, corn and wheat each recorded a third consecutive
higher close. Soybeans were buoyed by news that the United
States and top global soy buyer China will hold trade talks next
week.
    Stock and commodity markets rallied after Beijing announced
a new round of negotiations with Washington on Jan. 7-8,
bolstering hopes of a resolution to a tariff war that has
clouded the global economic outlook.
    "Fund managers are buying commodities on the possibility (of
increased commodity sales to China), along with hopes that a
trade deal would be good for the U.S. and global economy," INTL
FCStone chief commodities economist Arlan Suderman said in a
client note.
    As the most valuable U.S. agricultural export to China,
soybeans have been most sensitive to developments in the trade
dispute. But traders also see scope for improved relations to
trigger Chinese imports of U.S. cereals like corn and wheat.
    Worries about declining South American crop prospects added
support to soy futures. INTL FCStone cut its estimate of
Brazil's soybean crop by about 4 million tonnes to 116.25
million tonnes due to a drought affecting some areas.

    Wheat futures rose on news that Algeria, a major wheat
importer, rejected a wheat shipment from Argentina that was
below contractual quality standards. 
    "More of us are thinking (that) there are quality issues
with the Argentinian crop," said Dan Basse, president of
Chicago-based AgResource Co.
    Support also stemmed from projections for a drop in U.S.
winter wheat plantings compared to a year ago.
    Private analytics firm IEG Vantage, formerly known as
Informa Economics IEG, estimated U.S. winter wheat seedings for
the 2019 harvest at 31.513 million acres, down from the 32.535
million acres the U.S. Department of Agriculture said farmers
planted a year earlier.
    The firm's winter wheat seedings figure includes 22.207
million acres of hard red winter wheat, 5.850 million acres of
soft red winter wheat and 3.456 million acres of white winter
wheat.
    The USDA on Friday delayed its U.S. winter wheat seedings
report along with several other reports because of the
two-week-old partial government shutdown.
    New release dates for the data, originally scheduled for
Friday, Jan. 11, will be set once government funding is
restored, USDA said.
    
    CBOT settlement prices: 
                                  Net      Pct  Volume
                         Last  change   change        
 CBOT wheat     WH9    517.00    3.25      0.6   41760
 CBOT corn      CH9    383.00    3.25      0.8  141421
 CBOT soybeans  SH9    921.50    8.75      1.0   71148
 CBOT soymeal   SMH9   319.00    2.30      0.7   35273
 CBOT soyoil    BOH9    28.64    0.21      0.7   40632
    NOTE: CBOT March wheat, corn and soybeans shown in cents per
bushel, March soymeal in dollars per short ton and March soyoil
in cents per lb. 

 (Reporting by Julie Ingwersen in CHICAGO; additional reporting
by Gus Trompiz in PARIS and Emily Chow in KUALA LUMPUR; Editing
by Grant McCool and Sandra Maler)
  
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