Soybeans climb to 16-month high on U.S.-China trade optimism

Chicago soybean futures gained more ground on Monday with prices hitting a 16-month peak as progress in U.S.-China trade talks underpinned the market.

Corn hit a 2-month high while wheat rose to its highest since mid-July.

FUNDAMENTALS
* The most-active soybean contract on the Chicago Board Of Trade (CBOT) jumped to its highest since June 2018 at $9.46 a bushel.

* Corn rose to its highest since Aug. 12 at $4.02-1/2 a bushel and wheat touched $5.14-3/4 a bushel, the highest since July 19.

* U.S. President Donald Trump on Friday outlined the first phase of a deal to end a trade war with China and suspended a threatened tariff hike, but officials on both sides said much more work needed to be done before an accord could be agreed.

* The emerging deal, covering agriculture, currency and some aspects of intellectual property protections, would represent the biggest step by the two countries in 15 months to end a tariff tit-for-tat that has whipsawed financial markets and slowed global growth.

* Soybeans, the largest U.S. crop export to China, have been supported by purchases of U.S. soybeans by China in the run-up to the latest round of trade talks, including a 398,000-tonne sale reported by the USDA on Thursday.

* The market continues to monitor a winter storm bringing blizzard conditions to parts of the Dakotas. Freezing temperatures were expected for Minnesota and Iowa this weekend.

* Large speculators trimmed their net short position in CBOT corn futures in the week to Oct. 8, regulatory data released on Friday showed.

* The Commodity Futures Trading Commission’s weekly commitments of traders report also showed that non-commercial traders, a category that includes hedge funds, increased their net short position in CBOT wheat and trimmed their net short position in soybeans.

MARKET NEWS

* Asian share markets pushed higher on Monday as signs of progress in the Sino-U.S. trade standoff whetted risk appetites, while pressuring safe-haven bonds and the yen.

DATA/EVENTS AHEAD (GMT)
0630  India   WPI Inflation YY     Sept  
N/A   China   Exports YY           Sept
N/A   China   Imports YY           Sept
N/A   China   Trade Balance USD    Sept
     
 Grains prices at 0058 GMT
 Contract    Last    Change   Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  511.00  3.00     +0.59%   +3.65%       485.28  73
 CBOT corn   400.50  2.75     +0.69%   +5.33%       375.53  66
 CBOT soy    944.75  8.75     +0.93%   +2.30%       896.35  83
 CBOT rice   12.04   -$0.02   -0.17%   +0.00%       $12.02  62
 WTI crude   54.60   -$0.10   -0.18%   +1.96%       $55.72  
 Currencies                                                 
 Euro/dlr    $1.103  -$0.001  -0.12%   +0.21%               
 USD/AUD     0.6782  0.000    -0.07%   +0.31%

Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential
Source: Reuters (Reporting by Naveen Thukral; Editing by Shounak Dasgupta)