Corn Futures Rebound as Trade Deal Doubts Ease
17 January 2020 - 9:11PM
Dow Jones News
By Kirk Maltais
--Corn for March delivery rose 3.7% to $3.89 1/4 a bushel on the
Chicago Board of Trade on Friday, recovering from Thursday's slide
as traders rethought the U.S.-China trade deal's terms.
--Wheat for March delivery gained 0.9% to $5.70 1/2 a
bushel.
--Soybeans for March delivery rose 0.6% to $9.29 3/4 a
bushel.
HIGHLIGHTS
Benefit of the Doubt: Traders are starting to give President
Trump's initial trade deal with China the benefit of the doubt. "It
was a little oversold reaction," said Jason Britt of Central States
Commodities of Thursday's 3.1% drop. "Let's not badmouth (the
deal), let's see where it ends up," he said. Also helping corn was
a belated reaction to the passage of the USMCA in the U.S. Senate
Thursday. That deal is expected to spur higher corn exports to
Mexico.
INSIGHT
Bright Futures: Wheat crops outside the U.S. appear to be
suffering, which could give CBOT prices a boost. French soft wheat
plantings for 2020 are expected to be at a 19-year low of 4.47
million hectares, down 10% from last year, as heavy rainfall
affects planting decisions, INTL FCStone said. The firm predicts
Australia's wheat crop at 14.45 million metric tons, down more than
1 million tons from the USDA's estimate, after wildfires have
damaged more than 26,000 square miles of land.
China Wait: Any recovery in corn is expected to be limited
unless China begins large grain purchases. "Export sales are
expected to be lackluster without Chinese corn business, so there
are not a lot of short-term reasons to be long corn," said Tomm
Pfitzenmaier of Summit Commodity Brokerage. Even with the phase one
trade deal signed, there's an air of uncertainty. "At its core,
buying decisions by China are political, not commercial, and thus
are pretty much impossible to gauge," Charlie Sernatinger of
ED&F Man Capital said.
AHEAD
--President Trump is scheduled to speak at AFBF Annual
Convention on Sunday.
--Agricultural markets and the federal government will be closed
Monday in observance of Martin Luther King Jr. Day.
--The USDA releases its weekly grain export inspections data at
11 a.m. ET Tuesday.
--The EIA releases its weekly update on ethanol production and
inventories at 11 a.m. ET Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
January 17, 2020 15:56 ET (20:56 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.