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Soybeans Close Higher as China to Buy More Ag Products

Two-day talks were successful, but more needs to be done.

Soybean futures closed higher on Friday as China said it would buy more U.S. agricultural products after two days of high-level trade talks at the White House. 

Chinese President Xi Jinping said the Asian country will purchase more farm products from the U.S., which President Trump said was a sign of good faith as negotiations continue.

The presidents are expected to meet sometime in February to hammer out an agreement before the March 1 deadline. Negotiators made "tremendous progress" during this week's talks, Trump said. 

The sides have until the start of March to agree on trade terms or the U.S. will raise its tariff rate on more than $200 billion worth of Chinese goods to 25% from their current level of 10%. China would likely retaliate if that were to happen.

Soybeans rose 2 1/4¢ to $9.17 1/2 a bushel on the Chicago Board of Trade. Soymeal gained $2 to $312 a short ton, and soy oil lost 0.31¢ to 29.86¢ a pound.

Corn futures for March delivery added 1 3/4¢ to $3.78 1/4 a bushel in Chicago. 

Wheat futures surged after a warning from Australia's Bureau of Meteorology that said major growthing areas in western states will see below-average rainfall in the next three months ahead of planting.

The country, the world's fourth-largest exporter of the grain, has been facing severe drought for some time. Planting usually starts in April, so dry weather for the next three months will leave soil dry and reduce crop prospects.

Wheat for March delivery jumped 8¢ to $5.24 1/2 a bushel while Kansas City futures gained 10 3/4¢ to $5.09 3/4 a bushel.

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Thursday's Market Recap

Soybeans and grains closed lower on Thursday as trade talks with China ended without an agreement, as expected.

A Chinese delegation led by Vice Premier Liu He met with U.S. officials including Trade Representative Robert Lighthizer yesterday and today, and Liu was scheduled to meet President Donald Trump after talks concluded. Few expected any semblance of an agreement this week as the sides are too far apart on several issues. 

Trump said any agreement was "either going to be a very big deal, or it's going to be a deal that we'll just postpone for a little while." 

Negotiators have until March 1 to come to an agreement or the U.S. will increase its tariff rate on more than $200 billion worth of Chinese goods to 25% from their current level of 10%. Earlier in the day, the president told reporters that he believes a deal will be made by the deadline, but if not, "the tariff on China goes to 25%." 

Soybeans finished barely lower as prices were underpinned by hot weather in Brazil where temperatures are in the 90s. Still, the heat may break as cooler temperatures are forecast in the 11- to 15-day outlook. 

Soybeans fell 1/2¢ to $9.20 1/2 a bushel on the Chicago Board of Trade. Soymeal gained 20¢ to $311.30 a short ton, and soy oil was unchanged at 30.42¢ a pound.

Corn futures for March delivery lost 3 3/4¢ to $3.77 1/2 a bushel in Chicago. 

Wheat for March delivery declined 1/4¢ to $5.16 1/2 a bushel while Kansas City futures lost 2 1/4¢ to $5 a bushel.

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Wednesday's Market Recap

Grains and soybeans closed higher Wednesday as the two-day trade talks between the U.S. and China begin. 

A Chinese delegation led by Vice Premier Liu He and U.S. officials including Trade Representative Robert Lighthizer resumed negotiations in Washington. The talks are scheduled to last through tomorrow, when Liu is expected to meet with President Donald Trump. 

The president is "moderately optimistic" that a deal can be reached by the March 2 deadline, White House Economic Adviser Larry Kudlow told Fox Business. If an agreement isn't hammered out by then, the U.S. will increase its tariff rate on Chinese goods to 25% from 10%. 

The sides met earlier this month in Beijing. Early reports were that the negotiations went well, but it was later revealed that China wouldn't acquiesce to some U.S. demands. Commerce Secretary Wilbur Ross said last week that negotiators are "miles and miles" apart. 

Still, officials on both sides have expressed guarded optimism that a deal will eventually be worked out. 

Corn futures for March delivery rose 4¢ to $3.81 1/4 a bushel on the Chicago Board of Trade. 

Soybeans added 1¢ to $9.20 a bushel. Soymeal fell 60¢ to $311.20 a short ton, and soy oil rose 0.21¢ to 30.32¢ a pound.

Wheat for March delivery increased 4 1/2¢ to $5.17 3/4 a bushel while Kansas City futures added 2 1/2¢ to $5.02 3/4 a bushel.

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Tuesday’s Market Recap

Soybeans and grains closed lower Tuesday on skepticism about trade relations between the U.S. and China. 

Negotiators including Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer are scheduled to meet tomorrow and Thursday in high-level meetings. 

Commerce Secretary Wilbur Ross said he doesn’t expect a deal to be hammered out this week as the sides are still far apart on several issues including intellectual property issues and the U.S. trade deficit with China. 

The talks may be hampered after the U.S. announced criminal charges against Chinese tech company Huawei for allegedly stealing trade secrets from an American company and committing bank fraud by doing business with Iran, escalating tensions between the countries in the days before the negotiations. Ross said the charges were separate from the trade talks. 

White House Economic Adviser Larry Kudlow said on Fox Business that President Trump is “moderately optimistic” about an agreement with China before the deadline. If a deal isn’t reached by March 2, the Trump administration said it would bump the tariff rate on incoming Chinese goods to 25% from their current level of 10%. 

Soybeans for March delivery fell 3¾¢ to $9.19½ a bushel on the Chicago Board of Trade. Soymeal lost 40¢ to $311.80 a short ton, and soy oil declined 0.19¢ to 30.11¢ a pound.

Corn declined 2¢ to $3.77¾ a bushel.

Wheat for March delivery fell 5¢ to $5.13¾ a bushel while Kansas City futures dropped 6¼¢ to $5.00½ a bushel.

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Monday’s Market Recap

Soybeans closed lower Monday on worries about trade talks this week between the U.S. and China.

A delegation led by Chinese Vice Premier Liu He is expected in Washington on Jan. 30-31 for high-level talks about trade with U.S. representatives.

While the fact that the sides are talking is a positive, U.S. officials said they don’t see an agreement by the end of the negotiations this week. Commerce Secretary Wilbur Ross said last week the sides are still "miles and miles" apart amid ongoing concerns from the U.S. side on intellectual property and the trade deficit.  

Michael Pillsbury, the director for the Center for Chinese Strategy at the Hudson Institute, who reportedly is an adviser to the president, also has said he doesn’t expect negotiators to come to a trade agreement during the talks.

The U.S. and China have a temporary deal agreed upon by presidents Donald Trump and Xi Jinping in early December under which Washington has delayed raising tariff rates to 25% from 10% and Beijing agreed to purchase more agricultural products and curb levies on American automobiles.

Soybeans for March delivery fell 2¢ to $9.23 1/4 a bushel on the Chicago Board of Trade. Soymeal lost $1.50 to $312.40 a short ton, and soy oil added 0.23¢ to 30.26¢ a pound.

Corn declined 1/2¢ to $3.79 3/4 a bushel.

Wheat for March delivery fell 2¢ to $5.18 a bushel while Kansas City futures dropped 3 1/4¢ to $5.05 1/4 a bushel.

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