Winnipeg (MarketsFarm) – Soybean and corn futures at the Chicago Board of Trade remain in a holding pattern, waiting for concrete news on ongoing negotiations between the United States and China.
Activity during the last week of November was slowing down as traders moved to the sidelines ahead of the U.S. Thanksgiving holiday, with attention expected to focus on trade talks when activity picks up in December.
Additional U.S. tariffs on Chinese imports are set to go into place on Dec. 15. Grain markets generally expect a deal won’t happen before that point and the tariffs will be imposed, according to John Weyer, director of commercial hedging with Walsh Trading in Chicago.
“If that were to change, we might see a rally of sorts,” said Weyer. Although he added that seasonal trends usually lead to a slowdown at this time of year, so any kind of rally might not be that great.
“We’re trading headlines of nothing substantial,” said Weyer, adding the grains and oilseeds were better off trading in a steady pattern than reacting to the on-again/off-again trade rumours.
With little change on the trade front expected in the near future, corn was holding support in the March contract around US$3.70 per bushel. If the market breaks below that, Weyer placed the next downside target at US$3.50 per bushel.
Soybeans are looking a bit more bearish, according to Weyer, with prices nearing support around the mid US$8.70s per bushel area.
Aside from Chinese trade talks, weather conditions for the developing soybean and corn crops in South America “will be key as we move into January,” said Weyer.
