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Shine Fades on US-China Trade Agreement

14 October 2019

The shine fades on US-China trade agreement as grain trading turns mixed, writes Jim Wyckoff, market analyst.

US grain futures prices narrowly mixed overnight. Corn was down 1 to 2 cents, soybeans up around 1 1/2 cents and wheat 1 to 2 cents up.

After having the weekend to ponder the matter traders and investors now reckon the agreement is fraught with potholes that are likely derail it. There are now reports China wants more talks before even signing the Phase 1 agreement. "The devil is in the details," as the saying goes.

Also, the optimism expressed late last week regarding a UK-EU agreement on Brexit has also dimmed.

There was more dour economic news coming out of China to start the trading week. China’s exports to the US dropped 22% in September, year-on-year. China’s total exports fell 3.2% in the month. China’s total imports in September were down 8.5%.

IMAGE NAME/DESCRIPTION
Price uptrend in place and bulls have the power to suggest it can be sustained
© Jim Wyckoff

The weekly USDA crop progress report Monday afternoon is expected to show US corn harvest at 23% complete versus 15% complete last week and 38% last year. US soybean harvest is seen at 25% complete versus 5% last week and 38% last year at this time.

IMAGE NAME/DESCRIPTION
Bulls have firm near-term technical advantage as price uptrend in place. Price action likely to remain sideways-higher in near term
© Jim Wyckoff

A winter storm that hit the US plains and northern Midwest over the weekend, along with freezing temperatures over much of the Corn Belt, will further hamper the US corn and soybean harvest, which is already behind schedule.

Recent price action in corn, wheat and soybeans suggests harvest lows are in place and that prices can trend sideways-to-higher into the end of the year.

TheCattleSite News Desk



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