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Soybeans Flat As China Ramps Up Sales Amid Trade Truce

February 5, 2019 at 18:25 by Andrew Moran

Soybean futures are trading sideways on Tuesday, despite a plethora of positive news for the domestic industry. Soybean, which has expanded nearly 3% so far this year, has been finding support in 2019 on reports that China, the world’s biggest soybean consumer, is ramping up purchases of the US agricultural product.

March soybean futures dipped $0.005, or 0.05%, to $9.18 per bushel at 16:42 GMT on Tuesday on the Chicago Board of Trade (CBoT). Soybean has halved its losses from over the last 12 months, and if the current trend persists, then this could just be a hiccup for the commodity.

According to the US Department of Agriculture (USDA), China bought 612,000 tonnes of domestic soybeans on Monday. While this is a positive development, it is less than what traders had expected after the world’s top soybean buyer ordered a hefty haul last week.

COFCO Group, the Chinese state agricultural conglomerate, bought “millions of tonnes” of soybeans from the US on Friday. The purpose of the transaction was to institute a “consensus” on trade between the world’s two largest economies. It is also part of a larger move on the part of Beijing as the country pledged to purchase five million tonnes during the 90-day trade truce.

Last week, President Donald Trump confirmed that he would meet with Chinese President Xi Jinping to complete a comprehensive trade deal as both sides confirmed substantial progress in a recent two-day meeting.

Meanwhile, it was announced that Kazakhstan and the US will establish a factory that will produce non-GMO soybeans and corn seeds. The US-Kazakhstan partnership will also see two seed research centers in Kazakhstan’s north and south. They are expected to open in 2020.

Almas Tatishev, director general of KazSeed, said in a statement:

We attract the US experience in the sphere of seed production, create joint enterprises, ensure full transfer of technologies and experience exchange. The production capacity of the plant will reach 25,000 tons of seed per year, which will enable Kazakh farmers to plant on up to 1 million hectares of land.

In other commodities, March corn futures rose $0.075, or 0.2%, to $3.80 per pound. March wheat futures tumbled $0.05, or 0.1%, to $5.2525 a bushel. March orange juice futures tacked on $0.07, or 0.7%, to $1.20 a pound.

If you have any questions and comments on the commodities today, use the form below to reply.

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