January 9, 2019 / 3:01 AM / 4 months ago

GRAINS-US wheat rises for 2nd session on strong demand, soybean prices rebound

    * Wheat gains more ground on expectations of strong demand
    * Soybeans set to rise for 5 out of 6 sessions
    * Market expects China to buy more U.S. soybeans, grains 

 (Adds comment, detail)
    By Naveen Thukral
    SINGAPORE, Jan 9 (Reuters) - Chicago wheat futures rose for
a second session on Wednesday, gaining nearly 1 percent on
expectations of increased demand for U.S. cargoes as rival
exporters in the Black Sea region run out of surplus supplies.
    Soybean prices bounced back and were set to gain for five
out of six sessions, as Washington-Beijing trade talks boost
hopes for higher U.S. soybean sales to top importer China.
    The most-active wheat contract on the Chicago Board of Trade
 had climbed 0.9 percent to $5.22-1/4 a bushel by 0227 GMT,
having hit its highest since Dec. 20 at $5.24-1/2 a bushel on
    Soybeans were up 0.4 percent at $9.21-3/4 a bushel
after closing down 0.6 percent on Tuesday. Corn added 0.4
percent to $3.81-1/2, having closed down 0.6 percent in the
previous session.
    "Global wheat markets have been simmering for a long time
and are now threatening to break out," said Ole Houe, director
of advisory services at brokerage IKON Commodities in Sydney.
    "For most of 2018 we had Russian wheat weighing heavily on
the market, but that pressure is pretty much gone as we start
2019. We have seen U.S. wheat being about the cheapest wheat in
the world and there are strong signs demand has been picking up
over the last week."
    China and the United States will continue trade talks in
Beijing for an unscheduled third day as officials from the
world's two largest economies look to resolve their bitter trade
dispute that has slashed China's imports of U.S. soy.

    In a positive sign on Tuesday, China approved five
genetically-modified crops for import, the first in about 18
months, which could boost its overseas grains purchases and ease
pressure from the United States to open its markets to more farm
    Adverse crop-weather in top soybean exporter Brazil is
providing further support to prices.
    Brazil has harvested two enormous soybean crops in a row and
will likely see a third in 2019, but the volume might not be as
big as market participants were initially expecting, potentially
a particular concern for top customer China, Karen Braun, market
analyst for Reuters, wrote in a column.
    "Abundant Brazilian supply has allowed China to hold off
longer on buying U.S. beans," she said.
    INTL FCStone cut its estimate of Brazil's soybean crop by
about 4 million tonnes to 116.25 million tonnes due to a drought
affecting some areas.
 Grains prices at 0227 GMT
 Contract    Last    Change  Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  522.25  4.50    +0.87%   +1.02%       518.63  63
 CBOT corn   381.50  1.50    +0.39%   -0.39%       379.38  60
 CBOT soy    921.75  3.25    +0.35%   +0.03%       910.36  63
 CBOT rice   10.69   -$0.06  -0.51%   +2.00%       $10.67  63
 WTI crude   50.53   $0.75   +1.51%   +4.14%       $49.14  
 Euro/dlr    $1.145  $0.006  +0.54%   +0.54%               
 USD/AUD     0.7157  0.004   +0.63%   +2.17%               
 Most active contracts
 Wheat, corn and soy US cents/bushel. Rice: USD per
 RSI 14, exponential

 (Reporting by Naveen Thukral
Editing by Joseph Radford)
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