December 31, 2019 / 1:43 PM / 25 days ago

GRAINS-U.S. grain futures set for yearly rise on U.S.-China demand hopes

 (Updates with European trading, changes byline/dateline)
    By Gus Trompiz and Emily Chow
    PARIS/SHANGHAI, Dec 31 (Reuters) - Chicago wheat, corn and
soybean futures were set to post annual gains after an outline
U.S.-Chinese trade deal that could boost crop exports helped
prices rally towards the end of the year.
    The crop futures were little changed on Tuesday as markets
wound down during the last session of 2019 and awaited further
details on the agreement between Washington and Beijing that may
be signed in the week ahead.
    The most active soybean futures contract on the
Chicago Board of Trade had ticked down a quarter of a cent on
the day by 1317 GMT to $9.52-1/4 a bushel, just off Monday's
18-month high of $9.53.
    That put the benchmark up 6.4% over the year, in line for
its first annual gain in three years. 
    The most active CBOT wheat contract inched up 0.3% to
$5.57-3/4 a bushel, near Monday's 16-month peak of $5.64-1/2.
    Wheat was on course for a 10.8% increase over 2019 and a
third straight annual rise.
    CBOT corn was unchanged on the day at $3.88-1/4,
leaving it up 3.5% on the year so far.
    "Consolidation is the word today, particularly on oilseed
markets that have been strong," Arthur Portier of consultancy
Agritel said.
    "Now we're going have to see what the U.S.-Chinese deal
means in reality and if we see shipments flowing between the two
countries."
    China, the world's largest consumer of soybeans, and the
United States struck a "Phase 1" trade deal earlier in December
that includes a commitment by Beijing to increase purchases of
American agricultural products.
    The agreement helped revive soybean prices which had fallen
to a 10-year low in May due to demand worries caused by the
trade dispute between Washington and Beijing.
    Optimism surrounding the planned accord increased on Monday
after the South China Morning Post reported Chinese Vice Premier
Liu He will visit Washington this week to sign a Phase 1 trade
deal, while the White House trade advisor said the agreement
would be signed "within the next week or so".
    Oilseed markets, like soybeans, have also drawn support from
a rally in palm oil to three-year highs, linked to expectations
of lower production and a rise in biofuel demand.
    Malaysian palm oil futures closed slightly lower on Tuesday
to show a 44% gain for the year.
    The planned U.S.-China deal has added to healthy demand
prospects for wheat, which along with global harvest concerns
have supported higher global cash prices.
    Export prices for Russian wheat rose for a seventh straight
week.    
    Corn, meanwhile, has been buffeted this year by uncertainty
over the U.S. harvest.
    Chicago futures climbed to a five-year high after massive
rain delays to U.S. planting, before losing some ground due to
tepid demand and ample global supplies.
    
 Prices at 1317 GMT                                               
                              Last  Change    Pct     End  Ytd Pct
                                             Move    2018     Move
  CBOT wheat                557.75    1.75   0.31  503.25    10.83
  CBOT corn                 388.25    0.00   0.00  375.00     3.53
  CBOT soy                  952.25   -0.25  -0.03  895.00     6.40
  Paris wheat Mar           188.50   -0.50  -0.26  194.50    -3.08
  Paris maize Jan           168.50    0.00   0.00  175.00    -3.71
  Paris rape Feb            411.75   -1.00  -0.24  366.00    12.50
  WTI crude oil              61.20   -0.48  -0.78   45.41    34.77
  Euro/dlr                    1.12    0.00   0.29  1.1469    -2.08
 Most active contracts - Wheat, corn and soy US cents/bushel,
 Paris futures in euros per tonne
 
    
 (Reporting by Gus Trompiz in Paris and Emily Chow in Shanghai;
Editing by Shailesh Kuber/David Evans)
  
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