Grain Futures Rally, Extending Gains
September 20 2018 - 4:03PM
Dow Jones News
By Francesca Fontana
Grain futures extended Wednesday's gains, with the rally taking
many grain traders by surprise as they await updates on the ongoing
U.S.-China trade dispute.
November soybean contracts gained 2.4% to $8.50 1/4 a bushel at
the Chicago Board of Trade. December corn contracts gained 2%, and
December wheat contracts gained 0.3%. Analysts attributed
Thursday's unexpected gains to a weaker dollar and short-covering,
along with optimism stemming from solid export numbers and upcoming
poor weather.
As grain markets await developments in the conflict between the
U.S. and China, traders may be "reading in between the lines" and
taking the weaker dollar as a sign of optimism that a resolution is
approaching, said Bill Nelson, chief economist at Doane Advisory
Services.
This week's corn export data also contributed to the rally in
corn prices, said Brian Hoops of brokerage Midwest Market
Solutions. The U.S. Department of Agriculture reported corn export
sales of 1.38 million tons, exceeding trade expectations. Soybean
exports were also better than anticipated, while wheat exports were
in line with estimates, analysts said.
Soybean prices have been under pressure as the U.S. and China
have announced additional tariffs and as harvest season increases
supplies. But farmers and traders are expecting wet weather with
rain and flooding forecast over the next several days, which could
support prices by causing delays in harvest, Mr. Nelson said.
Meanwhile, wheat futures made small gains Thursday. Traders are
watching to see if poor weather in countries such as Australia and
Russia could give the U.S. more export opportunities for wheat,
analysts said.
Write to Francesca Fontana at francesca.fontana@wsj.com.
(END) Dow Jones Newswires
September 20, 2018 15:48 ET (19:48 GMT)
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