Grains-Subdued Market Assesses U.S. Floods, China Trade Prospects

March 20th, 2019

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Category: Grains, Trade

(Agriculture.com) – Chicago grain and soybean futures were flat to slightly lower on Wednesday as traders assessed the risks to U.S. spring planting from flooding and awaited more clues about trade talks between Washington and Beijing.

Prices remained curbed by ample global supplies, underscored by large corn and soybean crops expected in South America, and favourable growing conditions for wheat across Europe.

A cautious mood on financial markets before a U.S. Federal Reserve policy announcement later on Wednesday also encouraged the subdued trading in grains. The most-active soybean contract on the Chicago Board Of Trade was down 0.3 percent at $9.01-1/2 a bushel by 1246 GMT. “There is plenty of soybean supply around the world and we have yet to see China resume (normal) buying,” said one Singapore-based trader. As the most valuable U.S. agricultural export to China, soybeans have been a focal point in U.S.-Chinese negotiations to resolve their tariff dispute. China has bought several million tonnes of U.S. soybeans during a negotiating truce but prospects for an agreement remain unclear. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin plan to travel to China next week for another round of trade talks with Chinese Vice Premier Liu He, a Trump administration official said on Tuesday. At the same time, the spread of African swine fever in parts of China has curbed demand for protein-rich soymeal as animal feed, potentially reducing China’s overall import needs. The fever has spread to neighbouring Vietnam and the United Nations Food and Agriculture Organization on Tuesday advised the country to declare it as a national emergency.

Cereal markets have also been holding out for possible Chinese commitments to import U.S corn and wheat as part of a wider trade settlement with Washington. Traders were monitoring flooding in U.S. grain belts. “The U.S. Midwest remains under threat from significant flooding. This could have consequences for spring wheat plantings and then on corn planting in mid-April,” consultancy Agritel said in a note. The flooding in the U.S. Midwest is likely to last into next week, as rain and melted snow flow into Kansas, Missouri and Mississippi, the National Weather Service said. CBOT corn was unchanged on the day at $3.71-1/4 a bushel, while CBOT wheat was flat at $4.56-1/2 a bushel. Minneapolis spring wheat futures edged down 0.2 percent to $5.64-1/4 after earlier touching a one-month high amid the flooding concerns for spring wheat zones.

Prices at 1146 GMT Last Change Pct End Ytd Pct Move 2018 Move CBOT wheat 456.50 0.00 0.00 503.25 -9.29 CBOT corn 371.25 0.00 0.00 375.00 -1.00 CBOT soy 901.50 -2.50 -0.28 895.00 0.73 Paris wheat May 188.75 -0.50 -0.26 205.00 -7.93 Paris maize Jun 169.50 -0.75 -0.44 184.50 -8.13 Paris rape May 358.00 2.00 0.56 365.25 -1.98 WTI crude oil 58.51 -0.52 -0.88 45.41 28.85 Euro/dlr 1.14 0.00 0.04 1.1469 -1.01 Most active contracts – Wheat, corn and soy US cents/bushel, Paris futures in euros per tonne

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