Soybeans lead agri gains on US-China trade war truce

Bloomberg

Soybeans led advances among US crop futures after the White House said China agreed to immediately restart buying American farm products as part of a trade truce between the two countries.
The oilseed jumped as much as 3.2 percent to the highest since June in Chicago, as corn and wheat also climbed, while Chinese soybeans fell on expectations of more supply. President Donald Trump and his Chinese counterpart agreed to pause the introduction of new tariffs and intensify trade talks, a significant turnaround in relations between the US and one of its top customers for farm products.
Still, sustained price gains will depend on how quickly shipments of soybeans and other products resume given the higher prices they’ll command in China due to the tariffs. The fact that China made no mention of agriculture in its statement after the meeting may also increase trader concerns over whether these purchases will materialise.
“The price spike in Chicago soybeans and the fall in Dalian is a normal market reaction to the US-China trade truce because China has agreed to start buying agricultural products from American farmers immediately,” said Monica Tu, an analyst at researcher Shanghai JC Intelligence Co. Still, “the market is very concerned about the outcome of further negotiations,” and whether there will be big purchases in the next few weeks, she said.
Soybeans for January delivery rose 2 percent to $9.12 1/2 a bushel in Chicago, after earlier reaching the highest for a most active contract since June 19.
As tit-for-tat trade tariffs ratcheted up between the nations this year, China slapped retaliatory duties on US soybeans and a host of other agricultural goods. Soybean futures tumbled as a result, and global agriculture trade flows were rerouted.
In exchange for the tariff pause, China pledged to buy “a not yet agreed upon, but very substantial, amount of agricultural, energy, industrial, and other products,”
according to the White House statement.
Crop prices for March wheat in Chicago rose 1.2 percent to $5.21 3/4 a bushel. March corn gained 0.9 percent to $3.81 1/4 a bushel. Paris wheat for March climbed 0.8 percent to 202.50 euros ($230) a ton.