Soyabeans edge higher on trade talk hopes

LONDON: US soybean futures edged higher on Thursday, as traders eyed a breakthrough in a trade war between Washington and Beijing, while corn and wheat prices eased.

The most active soybean futures on the Chicago Board Of Trade were up 0.3 per cent at $9.11 a bushel at 1117 GMT, extending the prior session's advance.

The gains came as traders took comfort from a potential thawing of the US-China trade war.

According to a source, a group of five crushers were told by China's state planner that they could apply for exemptions from the 25 per cent tariffs on some US soybean cargoes arriving before the end of December.

The information on tariff exemptions came as news emerged that top US and Chinese negotiators will meet face-to-face next week for the first time since leaders of both countries agreed in June to revive talks aimed at ending a year-long trade war between the world's two largest economies.

"The measure is aimed as a goodwill gesture to start the trade discussion on positive terms that will resume on Monday when a US trade delegation visits China," ING Economics said in a market update.

"Any hint of constructive talks at the discussion is likely to support soybean and corn prices next week."

China imposed a 25 per cent tariff on US soy imports last year as Washington-Beijing trade disagreements boiled over into tit-for-tat levies on each other's goods. That blow was felt on both sides of the Pacific, with China being the top buyer of US soybeans.

The most active CBOT corn futures fell 0.35 per cent to $4.29-1/2 a bushel, erasing some of the prior session's gains, as dealers continued to focus on the extent to which further hot, dry weather could threaten US corn yields.

Very hot and dry weather could return to the US Midwest in the next two weeks, particularly in parts of major producing states Illinois, Iowa and Indiana, according to a report by Commodity Weather Group on Wednesday.

CBOT's most active wheat futures fell 0.85 per cent to $4.93-1/2 a bushel, while December wheat futures on Paris-based Euronext fell 0.3 per cent to 179.50 euros a tonne.

Dealers said supplies remained ample despite some downward revisions to the crop outlook in Russia.

"The supply situation on the global wheat market is no longer quite as comfortable as initially thought ... That said, there can also be no talk of a severe tightening of supply," Commerzbank said in a market note.