Soy futures up; wheat steady

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    CHICAGO- US soybean futures rose for a fourth consecutive session as China said it would waive import tariffs for some American farm products, renewing optimism for a possible trade agreement between Washington and Beijing.

    Tariff waivers will be based on applications by individual companies for US soybean and pork imports, China’s finance ministry said in a statement, citing a decision by the country’s Cabinet. It did not specify the quantities involved.

    The statement supported futures prices because China, the world’s biggest soybean importer, has slashed purchases from the United States since the start of the countries’ trade war last year. Beijing imposed retaliatory tariffs on US soybeans, and China has been buying from South America instead.

    US traders and farmers hope negotiations will ease the trade war and increase Chinese purchases of American agricultural products. The tariff waivers are “good mood music,” White House economic adviser Larry Kudlow said.

    The most-active soybean contract on the Chicago Board of Trade rose 5-1/4 cents to $8.89-1/2 a bushel. It reached its highest since Nov. 26 after rebounding from a near three-month low of $8.67-1/2 on Monday.

    Short-covering helped underpin gains, said Matt Wiegand, commodity broker for FuturesOne. Recent declines had left the market in an “oversold” condition, he added.

    But traders remained cautious about the protracted US-Chinese trade negotiations. Several industry sources in the United States and China interpreted Beijing’s tariff waiver announcement as official confirmation of duty exemptions on up to 10 million tons of soybeans that sources said were offered to importers earlier this year.

    Traders also expect that rival soybean supplier Brazil will harvest a record crop in the coming months.

    “The Chinese have switched their bean buying to South America for the February/March period and so we expect US soybean exports to come to a halt soon,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa. – Reuters