(Updates with comments, background)
SHANGHAI, Dec 27 (Reuters) - U.S. soybean futures rose in early trade on Friday, hovering near an 18-month high hit in the previous session, as bullish hopes that China will ramp up soy purchases following a recently struck trade deal supported the market.
China, the world’s largest consumer of soybeans, and the United States reached a Phase 1 trade deal earlier this month that includes a commitment by Beijing to increase purchases of U.S. agricultural products.
China’s commerce ministry said on Thursday Beijing was in close contact with Washington, adding that both sides were still going through necessary procedures before the signing of the deal.
“The market is getting confident that China is going to make meaningful purchases. There was a lot of debate in the last two weeks whether the agreement was real, if it was feasible for China to make such purchases,” said Ole Houe, director of advisory services at brokerage IKON Commodities in Sydney.
The most active soybeans futures, which rose to their highest since June 2018 in the previous session, were up 0.1% at $9.47 a bushel as of 0340 GMT.
Wheat prices also advanced, on course for a third straight winning session, as global demand supported the market. The most active wheat futures were up 0.5% at $5.51-3/4 a bushel.
“Wheat in particular has been seeing quite solid demand around the world,” Houe said.
“We’re seeing EU exports running ahead of projections. Black Sea exports were down last year but that was a record year. U.S. exports are solid as well. We’re seeing a lot of demand.”
Japan’s Ministry of Agriculture, Forestry and Fisheries announced on Wednesday that it will import 23,048 tonnes of feed-quality wheat for livestock, while Jordan’s state grains buyer has issued a tender to buy 120,000 tonnes of wheat.
The U.S. Department of Agriculture (USDA) on Friday is expected to report that wheat export sales last week were 200,000 to 900,000 tonnes, according to a Reuters survey of analysts.
Russia’s agricultural consultancy SovEcon said on Thursday it had lowered its 2019/2020 wheat export forecast by 0.2 million tonnes to 33.1 million tonnes.
Meanwhile, the most active corn futures slipped 0.1% to $3.88-1/4 a bushel but were on track to post their third straight weekly gain.
China warned earlier this week that a destructive pest that has threatened the country’s grain output is expected to hit more crops across wider areas in 2020, including the key corn-growing region in the northeast.
Reporting by Emily Chow; Editing by Subhranshu Sahu and Aditya Soni
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