Chicago soybean futures edged up on Friday, inching away from a decade low as traders watched to see if US-Chinese trade talks would overcome tensions that triggered fresh tariffs from Washington.
Chicago corn and wheat also inched higher, with the run-up to widely followed US Department of Agriculture (USDA) supply and demand forecasts later in the day also encouraging grain markets to consolidate.
The most active soybean contract on the Chicago Board of Trade (CBOT) was up 0.1% at $8.13-1/4 a bushel by 10:57am GMT, edging away from Thursday's low of $8.06-1/2, a level not seen since December 2008.
The most active contract is poised for its biggest weekly slide since August last year with a loss of 3.4%.
US And China
Prospects for a trade settlement between Washington and Beijing have been thrown into doubt by new US tariffs against $200 billion of Chinese goods that took effect on Friday.
Top US and Chinese trade negotiators are nonetheless due to continue discussions in Washington on Friday after a first session on Thursday.
Soybeans were the most valuable US farm export to China prior to the trade standoff, and China has made several large purchases of US beans during the negotiating truce in place since December.
"People are going back to the situation where they see little hope for 2018/19 demand," Michael Magdovitz, commodity analyst at Rabobank, said.
"Even if China does not take actual countermeasures, they won't be making further goodwill purchases (of soybeans)," he said.
However, with low prices likely to discourage farmer selling and speculative investors already holding large short positions, there were grounds for soybean and grain markets to bottom out, he added.
Chicago Board Of Trade
CBOT corn was up 0.1% at $3.53-3/4 a bushel and was also on track for a weekly fall, snapping gains made in the two previous weeks.
CBOT wheat was up 0.4% at $4.31-1/4 and on track for its fifth straight weekly decline.
Downward pressure on prices has also come this week from weather forecasts calling for drier weather in soggy parts of the US Midwest, where delayed corn planting had supported prices in the past two weeks.
The USDA's May supply and demand report, due at 4:00pm GMT, is expected to confirm large US and global inventories of soybeans, corn and wheat.
The report will include the agency's first projections for the upcoming 2019/20 season. Decent growing conditions in the United States and top exporter Russia have helped curb wheat prices in recent weeks.
The United Nations' Food and Agriculture Organisation (FAO) on Thursday forecast world cereal production would rise to a record 2.722 billion tonnes in 2019.
News by Reuters, edited by Helen Galgey Checkout. Click subscribe to sign up for the Checkout print edition.
