Soybeans hover near two-week peak as China buying weighs

PARIS/KUALA LUMPUR: Chicago soybean futures ticked lower on Thursday, consolidating near a two-week high, as the oilseed market assessed weather risks for Brazilian crops and sought evidence of more Chinese purchases of US supplies as part of a trade truce.

Corn and wheat were little changed after gaining ground in the previous session amid concern about adverse growing weather in South America.

The most-active soybean contract on the Chicago Board of Trade was 0.3 percent down at $9.04-1/4 a bushel by 1141 GMT. It had gained more than 1 percent in the previous session, touching a two-week top of $9.10-1/2.

China last month resumed large purchases of US soybeans after Washington and Beijing agreed to a 90-day truce in a trade dispute that has brought tit-for-tat tariffs on goods including soybeans, the most valuable US agricultural export to China.

Chatter about further Chinese purchases has lent support to Chicago futures at the turn of the year.

However, a partial government shutdown in the United States has prompted the US Department of Agriculture (USDA) to suspend daily and weekly export sales reports, depriving traders of potential confirmation of further deals.

"The market remains cautious in the absence of official (US) figures, especially on weekly sales, a key element for future price developments," consultancy Agritel said in a note.

The USDA will decide on Friday whether to delay a series of crop reports scheduled for release on Jan. 11.

The soybean market has also drawn support from dry conditions in parts of Brazil, the world's largest soybean exporter, which has led some forecasters to trim harvest expectations that have been running at record levels.

A lack of rain has also started to raise concern about Brazil's corn harvest. In Argentina, meanwhile, heavy rain rekindled worries about damage to the wheat harvest, though the wet weather is not expected to hurt corn and soy crops.

CBOT corn eased by 0.1 percent to $3.75-1/2 a bushel while CBOT wheat gained 0.1 percent to $5.07-1/4 a bushel.

The wheat market has been waiting for signs of a sustained upturn in US exports as supply in top supplier Russia ebbs.

Russian wheat exports rose sharply to 1.2 million tonnes in the last week of December, but trade is expected to be thin during the Dec. 30-Jan. 8 New Year holiday, according to agricultural consultancy SovEcon.