Grains-Prices Edge Lower as Geopolitical, Harvest News Awaited

October 16th, 2019


Category: Grains

( – Chicago grain futures ticked lower for a second session on Wednesday as investors weighed uncertainty around U.S.-China trade talks and negotiations over Britain’s exit from the EU while also waiting for a clearer picture of U.S. harvesting. Losses were limited by risks around a slow-moving corn harvest in the U.S. Midwest as well as hopes that progress in U.S.-China trade talks last week will translate into increased Chinese purchases of U.S. crops. Prices were also consolidating after hitting multi-month highs this week. The most-active corn contract on the Chicago Board Of Trade was down 0.8% at $3.90 a bushel by 1117 GMT. CBOT wheat lost 0.4% to $5.05 a bushel, while soybeans inched down quarter of a cent to $9.33-3/4.

“Geopolitics remains at the centre of the news with a now-possible agreement on Brexit,” consultancy Agritel said. “As for the China/USA negotiations, there is still doubt about a deal on purchases on $ 50 billion of U.S. (farm) commodities.” U.S. President Donald Trump said on Friday that China had agreed to purchase $40 billion to $50 billion worth of U.S. agricultural goods in a first phase of an agreement to end a 15-month trade war. But China would make the purchases only if Trump rolls back levies put in place since the trade war began, Bloomberg reported on Tuesday, citing people familiar with the matter. Investors were also watching to see if negotiations between British and European Union officials would bring a deal allowing an orderly UK exit from the bloc on Oct. 31, after hopes of an overnight agreement were disappointed.

Grain markets were assessing the U.S. Department of Agriculture’s latest crop progress report, issued on Tuesday. The USDA said 22% of the corn crop had been harvested, behind market expectations, and 26% of the soybean crop, slightly ahead of market forecasts. Harvest progress remained below the average pace of recent years, adding to uncertainty about yields after exceptionally late planting this year due to torrential rain in spring. The soybean market was also curbed by data from the National Oilseed Processors Association on Tuesday showing that its members crushed 152.6 million bushels of soybeans in September, down 9% from August and below the lowest level in a range of trade expectations. The wheat market was awaiting the results of the latest tender by top importer Egypt on Wednesday, with Black Sea origins like Russian and Ukrainian wheat expected to dominate bidding again.

Prices at 1117 GMT Last Chang Pct End Ytd e Move 2018 Pct Move CBOT wheat 505.00 -2.00 -0.39 503.25 0.35 CBOT corn 390.00 -3.25 -0.83 375.00 4.00 CBOT soy 933.75 -0.25 -0.03 895.00 4.33 Paris wheat Dec 178.75 0.50 0.28 191.25 -6.54 Paris maize Nov 164.00 0.00 0.00 175.25 -6.42 Paris rape Nov 383.75 0.00 0.00 364.00 5.43 WTI crude oil 52.93 0.12 0.23 45.41 16.56 Euro/dlr 1.10 0.00 -0.03 1.1469 -3.85 Most active contracts – Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne

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