Wires

GRAINS-Soybeans sag despite U.S.-China trade deal signing; wheat soars

Julie Ingwersen

(Updates with CBOT settlement prices) CHICAGO, Jan 15 (Reuters) - U.S. soybean futures fell to a one-month low on Wednesday even as U.S. President Donald Trump signed a "Phase 1" trade deal with China, the world's top soy importer, reflecting traders' uncertainty about the terms of the pact. Corn followed soybeans lower, but wheat futures surged to their highest in more than a year, buoyed by rising global cash prices and technical buying, analysts said. Chicago Board of Trade soybeans for March delivery settled down 13-1/2 cents at $9.28-3/4 per bushel after dipping to $9.28-1/4, the contract's lowest since Dec. 16, shortly after the U.S.-China trade pact was announced on Dec. 13. CBOT March corn ended down 1-1/2 cents at $3.87-1/2 a bushel while March wheat finished up 4-3/4 cents at $5.73-1/4, after reaching $5.78-3/4, the contract's highest since November 2018. Soybeans fell as traders remained skeptical about whether China would ramp up purchases of U.S. supplies in the face of strong competition from South America. China committed to additional purchases of U.S. agriculture products by $32 billion over two years, the deal said, including $12.5 billion above the corresponding 2017 baseline of $24 billion in 2020 and $19.5 billion above the baseline in 2021.

But the agreement did not list specific volumes by commodity, and it said market conditions may dictate the timing of purchases. "There are a lot of question marks here, and I don't think the market likes the uncertainty," said Joe Vaclavik, president of Standard Grain, a brokerage. "I don't know if the soybean market was ever convinced that we were going to see record purchases of soybeans. It never traded that way," Vaclavik said. CBOT soybeans faced additional pressure as soyoil futures fell 2%, pressed by sliding Malaysian palm oil futures and larger-than-expected U.S. soyoil stocks. The National Oilseed Processors Association (NOPA) reported U.S. soyoil stocks ballooned to 1.757 billion pounds by the end of December, up 21% from the previous month and topping trade expectations. On a bullish note, NOPA reported that its members crushed 174.8 million bushels of soybeans in December, the second-most on record. Wheat futures shrugged off the weakness in soybeans and rallied as signs of rising global cash prices attracted speculative buyers. "Wheat has been an inertia market ... and as we keep making new highs, I think some speculative buyers keep piling into new length," said Dan Basse, president of AgResource Co in Chicago. "The hope is China will buy wheat, and I am sure they will. But trying to pick the day, the month, the class - it's going to be interesting," Basse said. Egypt's main state wheat buyer on Tuesday purchased 240,000 tonnes of Russian and Romanian wheat in an international tender, at prices that were up about $3 to $4 per tonne from a previous tender on Jan. 8.

CBOT settlement prices:

Net Pct Volume

Last change change

CBOT wheat WH0 573.25 4.75 0.8 73596CBOT corn CH0 387.50 -1.50 -0.4 129615CBOT soybeans SH0 928.75 -13.50 -1.4 108170CBOT soymeal SMH0 300.10 -1.90 -0.6 57412CBOT soyoil BOH0 33.30 -0.77 -2.1 82343

NOTE: CBOT March wheat, corn and soybeans shown in cents per bushel, March soymeal in dollars per short ton and soyoil in cents per pound.

(Additional reporting by Naveen Thukral and Sybille de La Hamaide; Editing by Louise Heavens and Tom Brown)