Chicago | Reuters — Chicago wheat futures rebounded on Thursday after a four-day slide, while the grains market overall steadied as U.S. and China trade negotiators sketched an outline for what could be a deal to end the trade war.
Thursday’s technical bounce in wheat was encouraged by optimism over the trade negotiations, which also helped soybean and corn futures gain ground.
“The key driver for today is what is happening with the U.S.-China talks,” said Don Roose, president of U.S. Commodities. “It’s trade, and trade, and more trade.”
Wheat dropped to a seven-month low on Wednesday as disappointing export news, including the absence of U.S. wheat offers in an Egyptian tender on Wednesday, and investment fund selling took prices through chart support levels.
On Thursday, Chicago Board of Trade’s March soft red winter wheat settled up 5-3/4 cents at $4.86-1/2 a bushel, while the most-active May contract settled up 6-3/4 cents at $4.91 a bushel (all figures US$).
CBOT March corn closed up 4-3/4 cents at $3.75-1/2 per bushel and CBOT March soybeans settled the day 8-1/2 cents higher at $9.11 per bushel.
Traders said soybean futures were briefly supported by Bloomberg reporting that China is expected to propose buying an additional $30 billion of U.S. agricultural imports annually.
But skepticism about the report kept a cap on the soybean rally, said Joe Davis, director of commodity sales for Futures International in Chicago.
“I think the market is almost just like the boy who cried wolf,” Davis said. “They are not believing anything until it happens.”
The corn market has also been supported by recurring talk that China could make large purchases of the cereal as part of a trade settlement with Washington.
The market’s attention also was turned to U.S. Department of Agriculture (USDA) planting estimates.
For this spring, the agency projected that U.S. farmers would plant 85 million acres of soybeans, down from 89.2 million acres in 2018; 47 million acres of wheat, down from 47.8 million acres in 2018; and 92 million acres of corn, up from 89.1 million acres in 2018.
Analysts had expected USDA to show a drop in wheat and soybean acreage and an increase for corn.
— P.J. Huffstutter reports on agriculture and agribusiness for Reuters from Chicago; additional reporting by Gus Trompiz in Paris and Julie Ingwersen in Arlington, Virginia.