Chicago Grains at Multi-Month Highs as Trade War Fears Ebb

By Gus Trompiz and Naveen Thukral

PARIS/SINGAPORE, Feb 5 (Reuters) – Chicago corn, wheat and soybeans set fresh multi-month highs on Wednesday, helped by a falling dollar and relief that U.S. tariffs did not appear to be triggering a trade war with major economies including China.

Adverse weather in South America was also lending support, though chart resistance was capping prices.

The most-active corn contract <Cv1> on the Chicago Board of Trade (CBOT) was up 0.3% at $4.96 a bushel by 1210 GMT. It earlier reached its highest since October 2023 at $4.98-1/2, just above a previous 15-month top struck last week.

CBOT soybeans <Sv1> were down 0.2% at $10.72-1/2 a bushel. They turned lower after hitting the highest since late July, surpassing a previous six-month top from Tuesday.

CBOT wheat <Wv1> added 0.7% to $5.80-3/4 a bushel, after hitting its highest since late October, beating a three-month peak from Tuesday.

Agricultural markets had feared that tariffs proposed by U.S. President Donald Trump against Canada, Mexico and China could hurt demand for U.S. farm goods in a tit-for-tat trade battle.

But Trump on Monday postponed tariffs against Mexico and Canada for a month, while Beijing announced limited retaliatory tariffs on U.S. goods on Tuesday that did not include crops like soybeans, the main U.S. agricultural export to China.

Some traders predict that China, the world’s biggest soybean importer, may boost purchases of the oilseed from the United States as part of trade negotiations.

“On one side fears of an all-out trade war have eased for now,” a Singapore-based grains trader said. “Corn and soybeans have additional support from weather issues in Argentina and Brazil.”

Drought in Argentina and excess rain in Brazil, which is slowing soybean harvesting and subsequent corn planting, continued to underpin corn and soy prices, traders said.

The dollar index <=USD> slipped for a second day, making U.S. commodities cheaper overseas. [FRX/]

In wheat, strength in corn along with slowing Russian exports and mixed conditions for northern hemisphere crops have helped prices rally since last month.

“It feels that the market is changing from ‘all news is bearish’ to something more bullish,” Andrey Sizov, head of crop consultancy Sovecon, said of wheat.

“There are potential problems with supply in 2025/26 and the Black Sea cash market is rising,” he added.

However, in a sign of weak Chinese demand, trade sources told Reuters that China had delayed imports of up to 600,000 metric tons of mostly Australian wheat and offered some of these cargoes to other buyers.

(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Rashmi Aich and Jan Harvey)