Corn, Wheat Drop Over 1 Percent as Trump Wins White House
Category: Grains
(Reuters) – Chicago corn and wheat slid more than 1 percent on Wednesday, while soybeans also lost ground, after the surprise victory of Republican Donald Trump in the U.S. presidential election.
The Chicago Board of Trade’s most-active corn contract was down 1.2 percent at $3.50 a bushel by 1200 GMT, while wheat also lost 1.2 percent to $4.10-1/4 a bushel.
Soybeans gave up 0.8 percent to $10.03-1/4 a bushel.
“It could take two or three days to shake out (market shock) because the market had heavily expected a Clinton win,” Matt Ammermann, vice president eastern Europe and Black Sea region at INTL FC Stone said on the sidelines of the Global Grain conference in Geneva.
“You could see a bit of weakness in grains, but we’ve also already priced in supply. If the dollar is weak that could favor exports.”
The U.S. dollar, Mexican peso and world stocks fell on Wednesday as Donald Trump swept to victory in the U.S. presidential election, but to a lesser extent than after the Brexit vote that wiped trillions off global markets. [MKTS/GLOB]
By 1220 GMT, the dollar had pared most of its losses against a basket of currencies. [FRX/]
Markets have tended to favor Clinton as a status quo candidate who was considered a safe pair of hands at home and on the world stage.
Fund buying and strong demand have lent support to agricultural markets in recent sessions.
Commodity funds were net buyers of CBOT corn, wheat and soybean futures contracts on Tuesday, traders said. <COMFUND/CBT>
Chinese importers have been locking in U.S. soybean shipments in recent weeks for delivery in the coming months although the country’s purchases fell in October.
China’s soybean imports for October were the lowest monthly purchases since February. It imported 5.21 million tonnes of the oilseed in October, down 5.8 percent year-on-year, customs data showed.
Traders are adjusting positions ahead of the U.S. Department of Agriculture’s monthly supply/demand reports on Wednesday. Analysts expect the government to raise its estimate of the record-large U.S. soy harvest, but robust export demand has offset worries about the size of the crop.
“I don’t think the USDA report is going to be overshadowed by the election. It’s a very important report. It’s going to show record soybean yields. It should be the period of maximum supply, so this could be the bottom of the market,” David Hightower, president of The Hightower Report, said in Geneva.
An early December start to harvesting of Brazil’s record summer grain crop will send exports of soybeans and corn onto global markets sooner than normal this season, which could create headwinds for bullish positions on grains futures markets.
