Grains Higher on Positive Developments in US China Trade Talks
May 21, 2018
Grains higher on positive developments in U.S./China trade negotiations. Precipitation expected across Midwest in 1-5 day forecast.
Grains Higher with Trade War “on Hold”
U.S. Secretary Steven Mnuchin said that the trade war with China is “on Hold” while the two countries work out a wider trade agreement. On Saturday, both countries said they would keep taking measures that would allow China to import more energy and agricultural commodities from the U.S. The U.S. will send a team to China to work out the details for increasing Ag and Energy exports. On Monday, U.S. President Donald Trump said China had pledged to buy “massive amounts” of American agricultural products. The grains rallied higher in the evening session with Dec ‘18 corn touching a high at $4.24 ¾ and November soybeans reaching 10.29 ¾.
Strong precipitation is expected across eastern NE, IA, S. MN and IL this week with the heaviest precipitation expected in IA. 6-10 day forecast brings moisture into the eastern corn belt where precipitation is needed. Temperatures are expected to be in the 80’s through the majority of the corn belt.
South America Weather
Argentina farmers have returned to the fields to assess the damage from excessive moisture. Harvest pace has been slow and is now 71% complete for soybeans and 34% complete for corn. Rains next week are expected in northeastern Argentina which will continue to slow harvest, but drier conditions are expected in the 11-30 day forecast. Weekend showers benefited Brazil’s 2nd crop corn over the weekend.
Commitment of Traders Report- Week ending May 15th
Bullish bets declined for corn and soybeans for Managed Money (MM) in the latest Commitment of Traders report. MM net long positions in corn declined 20,220 contracts to 191,672. MM net long positions in soybeans declined 18,980 to 108,061. MM CBOT wheat declined 9,848 to a net short position of 5,522. MM KCBT wheat also declined, slipping 4,440 to a net long position of 44,190.
Soy Crush Plant Strike in Argentina
A strike by crush plant workers started on Thursday to protest layoffs earlier this year. On Friday, the labor ministry ordered a “mandatory reconciliation” that would end the strike. Crush plant workers said they would obey a government order to end the strike.
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