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Analyst: “Trade meetings are going to be huge”

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Grain markets recorded little movement throughout the shortened trading week.

Brian Grossman, market strategist with Zaner Ag Hedge, comments on recent activity, or lack thereof.

“I think we are in a mid-week, mid-month, mid-everything lull here. We have played a game of back and forth in the grains,” Grossman said. “This entire week we have tried higher and lower. Ultimately, (we) have gone nowhere.”

Market analysts will keep a close eye on upcoming trade negotiations.

American and Chinese officials will meet next week in Washington, D.C. Grossman says these meetings are critical and could give grain markets a new sense of direction.

“The trade meetings are going to be huge because our deadline, of March 1, is coming up fast. If we see signs, I think the market is going to be optimistic. If they would fall apart, there will be a lot of fear and a lot of work that will need to get done in the next month,” Grossman said.

Grossman encourages crop producers to carefully consider making soybean sales, ahead of next week’s meetings. He believes this week and next provide an opportunity to eliminate some risk.

“If you have bushels that need moved in the near future, this might be your opportunity,” Grossman said. “If you are concerned about a wildly bullish outcome, there are a lot of things you can do on the board to minimize your risk to a bearish outcome.”

Aside from trade negotiations, analysts await government data, specifically the Quarterly Grain Stocks and January and February World Agricultural Supply and Demand Estimates (WASDE) reports.

IEF Vantage, formerly known as Informa Economics IEG, today (Thursday) released its 2019 crop production estimates. Grossman notes markets did not react to Informa’s estimates, as “we are trying to predict, several months out, what could change the rotation.”

“Informa came well in line with what I think a lot of people are expecting. A higher corn acreage of 91.5 million was definitely not out of line, in my opinion. Soybeans (at) 86.2 million (is) very much in the ballpark,” Grossman said. “Keep in mind, we can have a couple million acre difference from the Prospective Plantings to June Acreage report.”

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