CBOT Weekly: Bear market aching for bull news

WINNIPEG – The Chicago Board of Trade (CBOT) is currently a bear-market, according to broker Scott Capinegro of Barrington Commodity Brokers in Barrington, Ill.

“It’s like the markets are saying ‘show me something, we’ll take anything,’ but the bears are winning,” said Capinegro, noting there has been almost no news to drive the market in a bullish manner.

One example would be any news from United States/China trade negotiations. If there has been positive news, the commodity markets have reacted in such a way, but this week there has been nothing so far.

Capinegro suggested a summit between U.S. President Donald Trump and Chinese President Xi Jinping would provide that kind of spark, “otherwise the market doesn’t care.”

Being mid-April, the weather has yet to become a major factor and the broker said farmers are not that far behind with their spring planting. Although they have some field work left over from the fall to catch up on, such as spreading nitrogen.

With the price of corn, Capinegro commented farmers see the crop isn’t that profitable.

“They’re saying, ‘am I going to make the money from this crop when I can almost make the same thing with preventive planted acres?'” he stated, noting the crop insurance does help smaller farmers stay in business.

While African Swine Fever (ASF) has wrought havoc on China’s hog population, Capinegro said the country’s demand for soybeans sustained bids of US$9 per bushel on CBOT for several months.

Despite the South American soybean crop having entered the global market, he said Brazil and Argentina are not in the driver’s seat. China “is not in a big rush” to buy from them.

Also regarding ASF, Capinegro said there has been a fear of it spreading to the U.S.

“That would just finish off the demand for wheat, corn and beans,” he commented.

On wheat, he said the U.S. has continued to face strong competition from Russia and Ukraine.

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