Chicago Grains Catch Breath After U.S. Tariff Moves

By Gus Trompiz and Naveen Thukral

PARIS/SINGAPORE, Feb 4 (Reuters) – Chicago corn, wheat and soybeans were little changed on Tuesday after a volatile previous session, with traders assessing mutual U.S. and Chinese tariffs following a last-minute postponement of U.S. levies against Canada and Mexico.

Relief over a suspension of planned U.S. tariffs against Mexico, the biggest importer of U.S. corn, had spurred a rebound in Chicago grains on Monday.

A similar pause on planned duties on Canadian goods was also announced after the market close, further easing the immediate risk of disruption to grain trade.

“There is some relief for agricultural markets with suspension of U.S. tariffs on Canada and Mexico,” said one Sydney-based grains trader.

A new 10% U.S. tariff on all Chinese goods, however, was not delayed and Beijing responded hours before the levy took effect on Tuesday by announcing targeted tariffs on U.S. imports from next week.

There was caution in grain markets given the importance of China as the world’s biggest soybean buyer and a major importer of corn and wheat, though Beijing’s riposte was seen by analysts as measured and leaving room for negotiations.

“With so much geopolitical noise it’s very hard to read the market,” a European trader said.

The most-active corn contract on the Chicago Board of Trade (CBOT) <Cv1> was up 0.6% at $4.91-3/4 a bushel by 1159 GMT, near a 15-month high struck last week.

CBOT soybeans <Sv1> edged up 0.2% to $10.60-1/4 a bushel.

New-crop positions for both corn and soybeans were a touch lower, however.

Beans were capped by a slide in by-product soyoil <BOv1> after the delay to U.S. tariffs on Canada removed the immediate risk of disruption to large flows of Canadian canola oil.

Weather risks for South American crops, with drought in Argentina and excess rain in Brazil, continued to underpin corn prices.

CBOT wheat <Wv1> eased 0.3% to $5.65-1/4 a bushel.

Wheat traders were assessing a monthly update on conditions for U.S. winter wheat, with an improved rating for top producing state Kansas contrasting with declines elsewhere.

Commodity funds were net buyers of CBOT corn, wheat, soybean, soymeal and soyoil futures contracts on Monday, traders said. <COMFUND/CBT>

(Reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Sherry Jacob-Phillips and Sharon Singleton)