WINNIPEG, (MarketsFarm) – Despite a number of tough challenges in 2019, one broker at the Chicago Board of Trade said the year ended on a high note.
“For what we went through with China this whole year, this trade war, you had corn, wheat and soybeans close higher for the year on Dec. 31,” stated Scott Capinegro of Barrington Commodity Brokers in Barrington, Ill.
“I think it’s a win for 2019,” he said, but cautioned the gains “weren’t really anything to talk about.”
As 2020 gets underway, the United States Department of Agriculture (USDA) is scheduled to release its January supply and demand report on Jan. 10.
“We got a lot of corn still out in the field. What is the USDA going to say about that?” Capinegro questioned.
He’s hoping that the USDA’s World Agricultural Supply and Demand Estimates (WASDE) takes into the account that large amount of corn that wasn’t harvested in 2019. He noted there was a particularly large amount left to overwinter in North Dakota.
When it comes to trade, one factor that has rankled Capinegro are the mixed messages that have come out of China regarding corn.
“Just two years ago China said they found all of this corn they stored. This morning, they’re saying their corn supply is down.”
China announced on Wednesday they have suspended their plans to blend their gasoline to contain 10 percent ethanol by 2020. The National Development and Reform Commission (NDRC) said the country’s corn stocks were too low to proceed with the plan that China originally promised in 2017, according to Reuters.
Capinegro also noted that African swine fever reduced China’s usage of corn for feed and meal.
“It doesn’t add up,” he said, adding “China loves talking the markets down.”
The broker is hoping that next week’s expected signing of the Phase One trade deal between the U.S and China will be a boon to the markets. As well, he said the U.S.-Mexico-Canada Agreement, which succeeds NAFTA, will soon be ratified by the U.S. and Canada. When both trade agreements are secured, Capinegro expects demand to pick up in 2020.