Glacier FarmMedia | MarketsFarm — Soybean and corn futures at the Chicago Board of Trade are expected to hold rangebound and trade sideways through the holiday season, as market participants wait to get a better handle on what trade policies proposed by United States President-elect Donald Trump may mean for the commodities in the new year.
Trump announced he would increase tariffs on Chinese imports by 10 per cent when he takes office Jan. 20, while also imposing 25 per cent tariffs on goods from Canada and Mexico.
Any retaliation from China especially would be bearish for U.S. soybeans and corn in the long term, “I think a lot of those things will be worked out prior to Trump taking office,” said Sean Lusk of Walsh Trading in Chicago.
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“I think the next six weeks will be slow and choppy,” said Lusk, adding that he expected many market participants to “take the ball and go home” until the New Year.
“Corn is stuck in the mud here between US$4.20 to U$4.40,” said Lusk on the March contract. He added that January soybeans were also rangebound between US$9.80 to US$10.20 per bushel.
While relatively favourable South American production prospects were a bearish influence overhanging the grains and oilseeds, Lusk added that any geopolitical developments or ‘black swan’ events over the next few weeks could shake the futures out of their sideways patterns.
