CHICAGO (Reuters) - U.S. soybean futures climbed to a one-week high on Wednesday on declining yield prospects in Brazil and optimism about U.S. trade relations with top global soy buyer China, traders said.
Wheat futures rose, rebounding from multi-month lows on short-covering and concerns about excessive rains in Argentina, while corn was mixed in choppy trade.
As of 11:49 a.m. CST (1749 GMT), Chicago Board of Trade March soybeans were up 14 cents at $9.09 per bushel. CBOT March wheat was up 5-1/4 cents at $5.08-1/2 a bushel, and March corn was flat at $3.75 a bushel.
Soybeans led the way up and were on track to climb about 1.6 percent in the first trading day of the new year. Traders and analysts cited dry conditions in crop areas of central Brazil.
“People I respect are starting to slightly shrink the Brazilian soybean crop. It’s still a big crop, but not just not as big as what people were alluding to a month ago,” said Tom Fritz, a partner with EFG Group in Chicago.
Analysts also cited optimism that China might buy more U.S. soybeans as a trade delegation heads to Beijing for trade talks, although cash bids for soybeans shipped to the U.S. Gulf export terminal showed little change on Wednesday.
A media report last week said a U.S. trade team would travel to Beijing the week of Jan. 7 for talks.
“Cash markets are not telling me that China is doing anything regarding buying U.S. beans, but the market feels (hopeful) that this delegation is heading there,” said Matt Connelly, analyst at the Hightower Report in Chicago.
Excessive rains in parts of Argentina lent support to both CBOT soybean and wheat futures, analysts said. The moisture, coupled with forecasts for more rains in the next 10 days, could prompt a downgrade in the size or quality of Argentina’s wheat crop.
“Wheat is finally paying attention to the rains in Argentina. Plus, we beat the hell out of it to end the year,” Connelly said, noting that CBOT March wheat fell 1.6 percent on Monday and dipped to $5.01-1/4 a bushel, the contract’s lowest level since Jan. 24, 2018, on Wednesday before rallying.
Reporting by Julie Ingwersen