December 19, 2019 / 3:11 AM / a month ago

GRAINS-Soybeans edge lower, U.S.-China trade deal optimism caps losses

SYDNEY, Dec 19 (Reuters) - U.S. soybeans fell on Thursday, retreating from a one-month high touched earlier in the week, but continued optimism from the ‘phase one’ of U.S.-China trade deal capped losses.

FUNDAMENTALS

* The most active soybean futures on the Chicago Board Of Trade were down 0.2% at $9.26-3/4 a bushel by 0233 GMT, having closed little changed on Wednesday.

* The most active corn futures were up 0.2% at $3.87-3/4 a bushel, after closing down 0.8% in the previous session.

* The most active wheat futures were little changed at $5.48 a bushel, after ending 1.4% lower on Wednesday.

* The long-awaited U.S.-China ‘phase-one’ agreement agreed upon by the two sides last week includes a commitment by Beijing to expand purchases of U.S. farm products.

* But traders said they were wary about projections from Washington that deals will reach $40 billion to $50 billion within two years, compared with $24 billion before the trade dispute.

* Chinese importers bought at least two cargoes of U.S. soybeans after receiving another round of tariff-free quota for U.S. shipments on Tuesday, traders in both countries said.

* Profit-taking added pressure to the markets after the recent gains, traders said. Futures also ran into technical resistance on price charts following gains fuelled by investment fund flows, they said.

MARKET NEWS

* The dollar took in stride the impeachment of U.S. President Donald Trump on Thursday while its Australian counterpart rallied after a surprise fall in the country’s unemployment rate.

* Oil prices steadied on Wednesday after U.S. government data showed a decline in crude inventories and on expectations for an uptick in demand next year on the back of progress in resolving the U.S.-China trade fight.

* The S&P 500 ended a five-day winning streak on Wednesday as investors’ optimism about global economic growth was countered by a steep drop in FedEx Corp shares, but the benchmark index managed to hover near all-time highs. (Reporting by Colin Packham; Editing by Rashmi Aich)

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