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Soybeans, Grains Close Higher on U.S.-China Talks Optimism

USTR Lighthizer says he'd be surprised if a deal wasn't reached.

Soybean and grain futures closed higher on Friday on optimism about this weekend's talks between the U.S. and China at the Group of 20 meeting in Argentina. 

U.S. Trade Representative Robert Lighthizer said he would be surprised if the dinner between presidents Trump and Xi Jinping "wasn't a success." Scotiabank analysts said this week they believe a deal will be made, though it will be cursory and China will only make enough concessions to allow Trump to claim victory. 

Larry Kudlow, the director of the U.S. National Economic Council, said earlier this week that there was a “good possibility” an agreement could be reached. 

Soybean prices bounced back after closing slightly lower yesterday as rhetoric about the G20 meeting amplified. Futures sold off 18¢  on Monday, then rebounded by about 30¢ on Tuesday and Wednesday, and then closed down modestly yesterday before today's rebound. 

Despite the optimism, Trump said in a Wall Street Journal report this week that he is considering adding tariffs on imports of iPhones and laptops and wouldn’t back down from a plan to increase the rate of tariffs on some Chinese imports to 25% from 10% on January 1 if something isn’t hashed out. China said it's hopeful a deal could be reached. 

Soybeans for January delivery rose 6¢ to $8.93 1/4 a bushel on the Chicago Board of Trade. Soy meal added $1.20 to $310.70 a short ton, and soy oil gained 0.12¢ to 28.03¢ a pound. 

Corn futures for December delivery added 3 1/2¢ to $3.76 3/4 a bushel.

Wheat for March delivery gained 7 3/4¢ to $5.15 1/2 a bushel, and Kansas City futures rose 5 3/4¢ to $4.98 1/4 a bushel.

In the outside markets, West Texas Intermediate oil fell 1.7% and Brent crude declined 1.4%. The Dow Jones Industrial Average rose 0.5% and the U.S. dollar jumped 0.5%.

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Thursday Market Recap

Soybean futures closed slightly lower on Thursday, though off session lows, as prices continue to see-saw ahead of this weekend's Group of 20 meeting in Argentina.

Prices have been on a roller-coaster ride this week as traders on Monday pushed down prices more than 18¢ amid pessimism about a trade deal between the U.S. and China after the U.S. Trade Representative's office issued a report saying China has failed to curb its "unfair" trade practices and intellectual property theft. 

Futures rebounded on Tuesday and Wednesday, rising about 30¢ in the two sessions on renewed optimism about the potential for a deal. Larry Kudlow, the director of the U.S. National Economic Council, said earlier this week that there was a “good possibility” an agreement could be reached. 

Still, Trump said in a Wall Street Journal report this week that he is considering adding tariffs on imports of iPhones and laptops and wouldn’t back down from a plan to increase the rate of tariffs on some Chinese imports to 25% from 10% on January 1 if something isn’t hashed out. China said it's hopeful a deal could be reached. 

Soybeans for January delivery closed down 1¾¢ to $8.88¾ a bushel on the Chicago Board of Trade. Soy meal declined 30¢ to $310 a short ton, and soy oil lost 0.10¢ to 27.88¢ a pound. 

Corn futures for December delivery were unchanged at $3.73¼ a bushel.

Wheat for March delivery dropped 3¾¢ to $5.07¾ a bushel, and Kansas City futures closed down ¼¢ to $4.92 a bushel.

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Wednesday Market Recap

Soybeans closed up double digits for a second consecutive session on Wednesday ahead of the Group of 20 meeting in Argentina where high-level trade talks between the U.S. and China are scheduled to take place.

Presidents Trump and Xi Jinping are scheduled to meet on December 1, and while market-watchers aren’t optimistic a full-on deal will be agreed upon, some movement between the countries is expected. At the very least, the presidents will want to agree on some items even if they’re only cursory. 

Rhetoric from the world’s two largest economies has ramped up in recent days as the meeting approaches. Trump in a Wall Street Journal article this week said he is considering slapping tariffs on iPhones and laptops made in China and sold in the U.S. He also said he’s planning on moving forward with a plan to increase existing tariffs to a rate of 25% from their current 10% on January 1 if a deal isn’t reached.

Scotiabank analysts said neither side wants to give in, but also don’t want the trade war to escalate. It’s likely China won’t acquiesce to all of Washington’s terms, but could do just enough to allow Trump to claim victory, the bank said. 

Larry Kudlow, the director of the U.S. National Economic Council, said yesterday there was a “good possibility” a deal could be reached. 

Prices on Monday plunged more than 18¢, but rebounded yesterday, regaining almost 15¢ of those losses. Today’s gains put soybeans firmly in the black for the week. 

Soybean futures for January delivery jumped 15¼¢ to $8.90¾ a bushel on the Chicago Board of Trade. Soy meal rose $3 to $310.10 a short ton, and soy oil added 0.58¢ to 27.97¢ a pound. 

Corn rose 5¼¢ to $3.73¾ a bushel in Chicago.

Wheat for March delivery gained 4¾¢ to $5.11¼ a bushel, and Kansas City futures added 8½¢ to $4.92 a bushel on the CBOT. 

In the outside markets, West Texas Intermediate oil fell 2.4%, while Brent crude, the international benchmark, lost 2.3%. The Dow Jones Industrial Average was up 500 points, and the dollar dropped 0.6%.

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Tuesday Market Recap

Soybeans closed well higher, recouping almost all of Monday’s double-digit losses, as bargain hunters sought cheap contracts. 

Prices yesterday plunged to the lowest since late October, and daily technical indicators are pointing lower, said Dan Hueber, the author of The Hueber Report. There’s still downside to the $8.30 to $8.40 range, he said.

Futures rebounded on Tuesday on speculation that low prices will attract some demand. Purchases of U.S. soybeans has been slow in recent months as the ongoing trade war with China escalates.

China earlier this month sent a letter to Washington in a bid to kick of negotiations, but it reportedly didn't contain many of the stipulations demanded by the Trump administration. The U.S. Trade Representative's office recently released a report saying China hadn’t curbed its “unfair” trade practices, which Beijing denied. 

President Trump said in a Wall Street Journal article that he may put additional tariffs on iPhones and tablets from China, and that he isn't considering keeping the tariff rate at 10% and instead will raise it to 25% on January 1 as planned if a trade deal isn't reached. Trump and China President Xi Jinping are scheduled to talk at the Group of 20 meeting in Argentina this week. 

Soybean futures for January delivery rose 14¾¢ to $8.77 a bushel on the Chicago Board of Trade. Soy meal turned higher, rising 2.60¢ to $307.70 a short ton, and soy oil added 0.22¢ to 27.41¢ a pound. 

Corn was unchanged ato $3.56 a bushel. 

Wheat for March delivery dropped 7½ to $5.06½ a bushel, and Kansas City futures declined 6¼¢ to $4.83½ a bushel on the CBOT. 

In the outside markets, West Texas Intermediate oil rose 0.3%, while Brent crude, the international benchmark, gained 0.2%. The Dow Jones Industrial Average turned higher at the close, rising 108 points, and the dollar rose 0.3%. 

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Monday Market Recap

Soybean futures plunged Monday on concerns about trade negotiations between the U.S. and China during this week’s Group of 20 meeting in Argentina. 

Presidents Trump and Xi Jinping are scheduled to discuss trade during the meeting, and while both sides had been indicating a renewed desire to find common ground, tensions have escalated in recent days. 

The U.S. Trade Representative last week issued a report saying that China had taken no steps to resolve what Washington calls “unfair” trade practices and intellectual property theft. Beijing responded with officials saying the report was without merit. 

China earlier this month sent a letter to U.S. negotiators as an overture to start talks, but reports are that the offer didn’t include most of what the U.S. trade officials had wanted to see. Following the USTR report last week, analysts have said they don’t expect much from talks this week, though time will tell. 

Soybean futures for January delivery dropped 18½¢ to $8.62½ a bushel on the Chicago Board of Trade. Soy meal lost $2.80 to $305.20 a short ton, and soy oil declined 0.66¢ to 27.19¢ a pound. 

Corn fell in sympathy, losing 2¾¢ to $3.56¼ a bushel. 

Wheat futures, however, were higher after Egypt last week announced it had purchased 120,000 metric tons of U.S. grain. The world’s biggest importer of the grain also bought Russian and Hungarian wheat. 

Prices also were higher on increased tensions between Russia and Ukraine – both major wheat exporters – after Russia reportedly seized three Ukrainian naval vessels and 23 crew members. Ukraine called the move an "act of aggression" while Russia said the ships were in its waters.

Wheat for March delivery gained 6¼¢ to $5.13½ a bushel, and Kansas City futures added 5¢ to $4.91 a bushel on the CBOT. 

In the outside markets, West Texas Intermediate oil was up 2.2%, while Brent crude, the international benchmark, added 2.9% on Monday. The Dow Jones Industrial Average jumped 340 points, and the dollar rose 0.1%. 

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