CBOT weekly outlook: Time running out for trade talks

CBOT May 2019 corn, with May 2019 soybeans in yellow. (Barchart)

MarketsFarm — As trade talks between the U.S. and China continue, many are watching headlines closely for hints of what’s to come.

The crop commodity market “has been in a downslide for a long time which is mainly due to U.S. and China trade uncertainties,” said Scott Capinegro of Barrington Commodity Brokers.

“It always sounds like progress is being made, but nobody wants to do or say anything just yet.”

Trade talks between the two powers have dragged on considerably longer than expected.

“If Trump meets with China, that must mean a deal is on the table,” Capinegro said. “That will rally the markets.”

However, planting intentions and stocks numbers due out at the end of March from the U.S. Department of Agriculture, will move the market more than trade decisions.

Unpredictable spring weather may further impact the corn market.

“There’s a lot of snow coverage in Iowa and Minnesota. When thawing starts, we could see some flooding.”

With prices low and the prediction of a wet spring, corn acreage may be lower than predicted.

Fundamentals in soybeans are still bearish thanks to high global supply. Previous issues with Brazilian infrastructure contributed to market uncertainty, but have since been quelled.

“I think we’ll find value in grains, the wheat market, both beans and definitely corn,” Capinegro predicted.

Across the pond, the possibility of a “no-deal” Brexit was seen as potential good news for commodity markets. “No deal could be bullish for commodities, because the U.S. can deal directly with Britain without European Union tariffs,” Capinegro said.

Britain’s Parliament voted later Wednesday in favour of a cross-party motion that rules out a “no-deal” Brexit under any circumstances, after also voting Tuesday to reject Prime Minister Theresa May’s negotiated Brexit deal with the EU.

— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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