BEIJING: Chicago soybean futures rose on Friday, reaching a two-and-a-half-month high as hopes for continued demand from top global soy buyer China for US supplies supported prices.
Wheat dropped, and corn edged higher.
The most-active soybean contract on the Chicago Board of Trade (CBOT) Sv1 increased 0.2% to $11.39-1/2 a bushel by 0317 GMT.
The oilseed jumped 2.2% this week.
“Soybean prices have found great support from a significant upturn in US sales to Mainland China,” a Shanghai-based analyst said, who asked not to be named.
A report undefined in the South China Morning Post said that US President Donald Trump and Chinese President Xi Jinping, at a meeting in early April, could extend their countries’ trade truce for as long as a year.
Given the shifting US-China dynamics, traders are wary of holding short positions in soybeans ahead of a long US holiday weekend, analysts said.
China was “reported to be considering buying more US soybeans,” said the US Department of Agriculture in its monthly supply-demand report on Tuesday.
The US Department of Agriculture on Monday confirmed new export sales of 264,000 metric tons of US soybeans to China. However, traders are cautious about further demand given the competition from South America.
Trump said last week that China had increased its target for US soybean purchases.
However, ample global supplies limit soybean prices.
In South America, Brazil’s crop agency, Conab, raised its estimate of the country’s soybean crop to a record 177.98 million metric tons, up from its January forecast of 176.12 million.
Brazil is the world’s largest soybean producer and exporter.
This week, USDA raised its view of Brazil’s soy crop to 180 million tons.
CBOT wheat Wv1 stayed flat at $5.52-1/5 a bushel after gaining 4.3% for the week.
The grain jumped to a 3-month high on chart-based buying and short-covering.
Managed commodity funds hold a large net short position in CBOT wheat futures, leaving the market prone to short-covering rallies, while abundant global grain supplies continue to anchor prices.
Corn Cv1 gained 0.1% at $4.31-1/2 bushel after rising 0.3% for the week. Strong weekly export data lent support.
The USDA reported net sales of old-crop US corn in the week ended February 5 at 2,069,600 metric tons, topping a range of trade expectations for 600,000 to 1,500,000 tons.
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