May 21, 2018 / 3:40 AM / a month ago

GRAINS-Soybeans up 2 pct, near 1-week top after U.S.-China trade agreement

    * Soybeans rally as U.S.-China trade tensions ease
    * Upside in soybeans limited on record Brazilian crop 

 (Adds details, quotes)
    By Naveen Thukral
    SINGAPORE, May 21 (Reuters) - Chicago soybeans gained more than
2 percent on Monday, rising for a second session to a near one-week
high, after Washington and Beijing agreed to drop tariff threats,
easing fears about demand for U.S. shipments in top importer China.
    Wheat and corn rose more than 1 percent to hit a two-week high.
    The most-active soybean contract on the Chicago Board Of Trade
 was up 2.1 percent at $10.19-1/2 a bushel, as of 0301 GMT.
Earlier in the session, the market climbed to its highest since May
15 at $10.23 a bushel.
    Analysts said the market was drawing comfort from an easing of
tensions between the United States and China.
    "The United States and China have reached some sort of an
agreement because as much they perhaps do not like one another,
they are each too big to ignore," said Tobin Gorey, director of
agricultural strategy, Commonwealth Bank of Australia.
    The U.S. trade war with China is "on hold" after the world's
largest economies agreed to drop their tariff threats while they
work on a wider trade agreement, U.S. Treasury Secretary Steven
Mnuchin said on Sunday.
    In April, China proposed a 25 percent tariff on U.S. soybeans
as part of its response to Washington's plans to impose tariffs on
a range of Chinese products.
    But the upside in U.S. soybean prices is limited.
    "Soybeans and even wheat and corn have gone up, easing of trade
war tensions between the U.S. and China are supporting agricultural
markets," said Phin Ziebell, agribusiness economist at National
Australia Bank.
    "However, Brazilian soybeans are getting competitive and they
have a record crop to sell, so the upside for U.S. beans is
limited."
    Orders for nearly 1 million tonnes of U.S. soybean exports were
cancelled last week, according to U.S. government data released on
Friday, as cheap supplies from Brazil made U.S. cargoes less
attractive to buyers. 
    Corn climbed 1.1 percent to $4.07 a bushel, having gained
1.8 percent in the previous session, and wheat rallied 1.1
percent to $5.23-3/4 a bushel. Earlier in the session, both markets
climbed to their highest since May 4.
    Wheat also drew support as dry conditions are set to linger
across the U.S. Plains, threatening further damage to an
already-parched crop.
    Large speculators cut their net long position in CBOT corn
futures in the week to May 15, 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 cut their net long position in soybeans.
    
 Grains prices at 0301 GMT
 Contract    Last     Change   Pct chg  Two-day chg  MA 30    RSI
 CBOT wheat  523.75   5.50     +1.06%   +5.28%       501.31   63
 CBOT corn   407.00   4.50     +1.12%   +2.97%       398.01   67
 CBOT soy    1019.50  21.00    +2.10%   +2.46%       1035.64  54
 CBOT rice   12.40    $0.07    +0.57%   -0.84%       $12.94   42
 WTI crude   71.81    $0.53    +0.74%   +0.45%       $68.95   70
 Currencies                                                   
 Euro/dlr    $1.175   -$0.003  -0.24%   -0.39%                
 USD/AUD     0.7522   0.001    +0.15%   +0.17%                
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 hundredweight
 RSI 14, exponential
    

 (Reporting by Naveen Thukral; additional reporting by Colin
Packham in SYDNEY, Editing by Sherry Jacob-Phillips)
  
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