By Francesca Fontana
Grain futures extended Wednesday's gains, with the rally taking many grain traders by surprise as they await updates on the ongoing U.S.-China trade dispute.
November soybean contracts gained 2.4% to $8.50 1/4 a bushel at the Chicago Board of Trade. December corn contracts gained 2%, and December wheat contracts gained 0.3%. Analysts attributed Thursday's unexpected gains to a weaker dollar and short-covering, along with optimism stemming from solid export numbers and upcoming poor weather.
As grain markets await developments in the conflict between the U.S. and China, traders may be "reading in between the lines" and taking the weaker dollar as a sign of optimism that a resolution is approaching, said Bill Nelson, chief economist at Doane Advisory Services.
This week's corn export data also contributed to the rally in corn prices, said Brian Hoops of brokerage Midwest Market Solutions. The U.S. Department of Agriculture reported corn export sales of 1.38 million tons, exceeding trade expectations. Soybean exports were also better than anticipated, while wheat exports were in line with estimates, analysts said.
Soybean prices have been under pressure as the U.S. and China have announced additional tariffs and as harvest season increases supplies. But farmers and traders are expecting wet weather with rain and flooding forecast over the next several days, which could support prices by causing delays in harvest, Mr. Nelson said.
Meanwhile, wheat futures made small gains Thursday. Traders are watching to see if poor weather in countries such as Australia and Russia could give the U.S. more export opportunities for wheat, analysts said.
Write to Francesca Fontana at email@example.com.
(END) Dow Jones Newswires
September 20, 2018 15:48 ET (19:48 GMT)
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