CBOT March corn ended up 3-1/4 cents at $3.83 a bushel and March wheat raised 3-1/4 cents at $5.17 a bushel. Soybeans, corn and wheat each recorded a third consecutive higher close. Soybeans were buoyed by news that the United States and top global soy buyer China will hold trade talks next week. Stock and commodity markets rallied after Beijing announced a new round of negotiations with Washington on January 7-8, bolstering hopes of a resolution to a tariff war that has clouded the global economic outlook.
"Fund managers are buying commodities on the possibility (of increased commodity sales to China), along with hopes that a trade deal would be good for the US and global economy," INTL FCStone chief commodities economist Arlan Suderman said in a client note. As the most valuable US agricultural export to China, soybeans have been most sensitive to developments in the trade dispute. But traders also see scope for improved relations to trigger Chinese imports of US cereals like corn and wheat.
Worries about declining South American crop prospects added support to soy futures. INTL FCStone cut its estimate of Brazil's soybean crop by about 4 million tonnes to 116.25 million tonnes due to a drought affecting some areas. Wheat futures rose on news that Algeria, a major wheat importer, rejected a wheat shipment from Argentina that was below contractual quality standards. "More of us are thinking (that) there are quality issues with the Argentinian crop," said Dan Basse, president of Chicago-based AgResource Co. Support also stemmed from projections for a drop in US winter wheat plantings compared to a year ago.