U.S. grains: Corn, soy, wheat firm as U.S. dollar retreats

CBOT March 2019 soybeans with 20- and 50-day moving averages. (Barchart)

Chicago | Reuters — U.S. corn and soybean futures rose on Wednesday in light, largely technical trade as brokers awaited news from high-level U.S.-China trade talks in Washington, analysts said.

Wheat followed the firm trend, drawing late support from a downturn in the U.S. dollar after the Federal Reserve struck a cautious tone on its outlook for the economy.

Chicago Board of Trade corn for March delivery settled up four cents at $3.81-1/4 per bushel (all figures US$). CBOT March soybeans ended up two cents at $9.21 a bushel and March wheat rose 3-1/2 cents at $5.16-3/4 a bushel.

Grain markets drew support from a brutal cold spell in the U.S. Midwest that stalled grain movement over roads and rivers, underpinning cash markets. Hog slaughterhouses and grain elevators shut down as the coldest temperatures in years gripped the region.

But traders were reluctant to establish large new positions ahead of the trade talks in Washington, and ahead of a backlog of U.S. crop and financial reports following a month-long partial government shutdown.

“We are all waiting for some sort of news from the trade deal…We are optimistic about that, but until we get more news, we really can’t go anywhere. So we are just kind of stuck in the mud,” said Ted Seifried, chief market strategist for Chicago-based Zaner Ag Hedge.

The pivotal round of U.S.-China talks began Wednesday, aimed at digging out from a months-long trade war amid deep differences over Chinese practices on intellectual property and technology transfer.

Cabinet-level officials, led by Chinese Vice-Premier Liu He and U.S. Trade Representative Robert Lighthizer, gathered with about a month to reach a deal before a March 2 U.S. deadline to increase tariffs on Chinese goods.

Meanwhile, the U.S. Department of Agriculture said it will resume publishing its weekly export sales reports on Thursday, following the end of a month-long partial government shutdown.

USDA also said it would release its U.S. crop production, quarterly grain stocks and winter wheat seeding reports on Feb. 8.

CBOT wheat futures firmed late in the session as the dollar tumbled. The market also drew support from the Midwest cold spell, which could threaten dormant soft red winter wheat crops in some areas lacking snow cover.

The Commodity Weather Group said wheat in parts of Missouri, Illinois, Indiana and Ohio, totalling 15 to 20 per cent of the soft red crop, could be vulnerable to damage from the cold.

— Julie Ingwersen is a Reuters commodities correspondent in Chicago; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore.


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