By Kirk Maltais

--Soybeans for January delivery rose 1% to $9.07 1/2 a bushel on the Chicago Board of Trade on Friday, with the market reacting cautiously to China's confirmation of a trade deal.

--Corn for March delivery rose 0.9% to $3.81 a bushel.

--Wheat for March delivery rose 0.4% to $5.32 1/2 a bushel.

HIGHLIGHTS

Dearth of Details: The market finally got a Phase 1 trade deal between the U.S. and China, but the many-times-bitten grains traders were quite shy about jumping into futures. The Trump administration said China will buy between $40 billion and $50 billion worth of U.S. agricultural products, but traders are skeptical. "They need U.S. pork, they need U.S. soybeans," said Dave Marshall of First Choice Commodities. "Do they need $50 billion of agricultural goods? Absolutely not."

Christmas Comes Early: With China confirming it reached a deal in principle with the U.S. for the partial trade agreement, some traders say the market may be on course to continue a late-year rally. "If you start to make these [managed money] funds uncomfortable, we can maybe have a Santa rally," said Jason Britt of Central States Commodities.

INSIGHT

Looking for Answers: The big question of how much U.S. agriculture China intends to buy will likely be addressed by the USDA when it releases its next WASDE report Jan. 10. "I think a lot of us are trying to figure out how this will affect balance sheets," said John Payne of Daniels Trading. If the Chinese agree to buy more than their normal load of agriculture, the USDA would likely have to reconsider what grain inventories will look like, which would then inform how much U.S. farmers will have to plant in the next season, Mr. Payne said.

Delayed Gratification: The U.S. grains market may not immediately see a jump in export sales now that China has agreed to a limited trade deal, said Karl Setzer of AgriVisor. "I would be surprised to see a huge jump in sales right away, as China would have nothing left to prove," said Mr. Setzer, adding that most of the big sales of U.S. agriculture occurred when China wanted to show "good faith" in the negotiations. However, signing of the final deal appears contingent on China following through promises to buy more U.S. farm products.

South American Stumble: If a deal is indeed done, then South American grains prices will likely drop while U.S. prices rise, said Dan Basse of AgResource. "A confirmed deal would be bullish U.S. ag and force funds to cover shorts in corn, soybeans and pork," Mr. Basse said. "South American soy and corn basis would fall sharply."

AHEAD

--The USDA releases its weekly grain export inspections data at 11 a.m. ET Monday.

--The National Oilseed Processors Association (NOPA) will release its crush statistics at noon ET Monday.

--The EIA releases its weekly update on ethanol production and inventories at 10:30 a.m. ET Wednesday.

Write to Kirk Maltais at kirk.maltais@wsj.com

(END) Dow Jones Newswires

December 13, 2019 16:09 ET (21:09 GMT)

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