By Michael Hogan
HAMBURG, July 24 – Chicago soybeans firmed on Friday, though optimism over recent Chinese buying in the United States was tempered by concern that political tensions between the two economic heavyweights could disrupt further sales.
Wheat rose on hopes of new U.S. export sales with the dollar remaining low.
The Chicago Board of Trade’s most active soybean contract was up 0.1% at $9.01-1/4 a bushel by 1057 GMT. Corn rose 0.2% to $3.36-1/4 a bushel and wheat gained 1.2% to $5.36-1/4 a bushel.
“Soybeans have seen support from strong sales to China again this week, but this is being assessed against the growing U.S.-China political tension following consulate closures,” said StoneX commodity risk manager Matt Ammermann. “Political tension is not good for new commercial business.”
Weekly U.S. corn and soybean export sales reached multi-year highs in mid-July, propelled by big Chinese purchases.
“Prices hardly responded to these figures at all,” Commerzbank said. “This is because the latest escalation in the dispute between the U.S. and China makes it questionable whether these purchases will continue.”
The International Grains Council on Thursday cut its forecast for global wheat production in the 2020/21 season, partly reflecting lowered crop outlooks for the European Union, Russia and the United States.
“Wheat is seeing some support from hopes of more exports for U.S. supplies, helped by the weaker trend in the dollar this week,” said Ammermann. “Sales of U.S. wheat to China were confirmed this week and there is hope that perhaps the Chinese have bought more.”
Corn is rising ahead of a series of private yield estimates for the U.S. corn crop from next week, he added.
“Forecasts are for high temperatures in the next few days in U.S. corn belts, but later turning cooler with some rain, so overall there are minimal new fears in the market from a weather perspective,” Ammermann said. (Reporting by Michael Hogan Additional reporting by Naveen Thukral Editing by David Goodman)