Traders aren’t expecting much to move the corn and soybean markets in the upcoming weeks, as the United States moves into holiday mode.
“These markets are going to just be very choppy and of course we’re going into December and nobody likes to work (during the holiday season). There’s more parties, Washington goes on Christmas break, nothing gets done,” said Scott Capinegro of Barrington Commodity Brokers in Chicago, Ill.
The trading week is shortened this week due to American Thanksgiving on Thursday, Nov. 22. U.S. markets will be closed Thursday and then close early on Friday, Nov. 23.
“So no grain markets are open tonight (Nov. 22) and we open again Friday morning at 8:30 central standard time and we close at 12:05, so I mean nobody’s doing anything that day either,” Capinegro said.
On the U.S./China trade war front, traders are awaiting the meeting next week between U.S. President Donald Trump and Chinese President Xi Jinping at the G20 summit in Argentina. Capinegro doesn’t expect much to come out of the meeting though.
“Do I expect a deal? The earliest would be in January. I can’t see anything coming out of China that quickly. Look how long it took us to negotiate with Canada and Mexico,” he said.
China holds the bargaining power, according to Capinegro. U.S. farmers are harvesting their corn and soy crops and are being forced to store them while demand in China for soy meal is faltering. The African swine fever outbreak is raging on in China leading to less demand for protein to feed hogs. On top of that Brazil has planted some of its soy acres early and will have some soybeans ready for export in January.
“So China’s pretty much all of the sudden starting to get in the driver’s seat,” Capinegro said.
Capinegro does believe a deal will be reached between China and the U.S. eventually, but he suspects it will be on China’s terms.