Soy rises to highest since November with US-China talks in focus

Soybean futures reached the highest levels since Nov. 18 as traders eyed the potential for further sales of American supplies to China ahead a meeting between US President Donald Trump and his counterpart Xi Jinping.
A report ahead of the April meeting stated the two sides could extend their trade truce by as much as a year. That’s adding to optimism for American farmers, even as Brazil is harvesting a record crop, which is keeping South American beans cheaper than the US.

Earlier data Thursday showed US soybean exports falling to the lowest levels since June. The slowdown comes after China completed an initial round of purchases for 12 million tons in January. Trump last week said China could buy up to 20 million tons in the current season.


“We could see a deal that moves commodities to China in exchange for easing policies that give some relief to China,” StoneX chief commodities economist Arlan Suderman said in a note. “It wouldn’t be about economics, but about politics. It would be short term, and not long term.”

Hopes surrounding exports come as traders in Chicago have been rolling positions out of March contracts, with soybean’s May contract recently overtaking it as the most active. Soybeans for May delivery gained by as much as 1.5%, on track for the third straight increase.

Gains earlier this week in soybean oil futures are also underpinned prices for whole beans, as a US-India trade pact coupled with increased domestic biofuels mandates should raise demand for vegetable oil in the US.

Still, some are skeptical about additional US soy exports to China, given a widening discount in Brazil. The US Department of Agriculture in its monthly supply and demand report Tuesday raised its outlook for Brazil soy output and kept its forecast for US exports flat.

China “buying another 8 million metric tons of old crop US soybeans seems like a stretch,” Total Farm Marketing analyst Naomi Blohm said.

Prices:
Soybean futures were up 0.9% at $11.4925 a bushel as of 11:52 a.m. in Chicago. Soybean oil was down 0.3% at 57.31 cents per pound. Wheat rose 2.3% to $5.4950 a bushel. Corn edged up 0.6% to $4.3025 a bushel.