Grain market traders have been keeping a close eye out for developments on the global trade front, a couple rumors took them by surprise on Thursday. A market analyst outlines the trading session below.
The U.S. Department of Agriculture (USDA) recorded strong export sales for the week ending August 13, 2018. Sales of corn and soybeans exceeded analyst expectations. Corn exports came in around 1.4 million metric tonnes, while soybean exports fell shy of 927,000.
However, bullish rumors overrode the report. Zaner Ag Hedge market strategist Brian Grossman tells us what carried corn futures up 8 1/4 cents and shoved soybean futures 17 cents higher at midday Thursday.
?Corn (is) up 8 ? cents (and) soybeans are 17 cents stronger off of talk that China is buying 10 to 15 cargos from Argentina, which is turning around and buying it from the United States. That could be indicating that South America?s available bushels are getting depleted,? Grossman said.
?We also have talk that Argentina will be raising their export tax back up to 30-percent. There was chatter about that a couple weeks ago, but now it sounds more confident. That has to do with the recent IMS deal Argentina made to stay liquid in the financial market,? Grossman said. ?Following all of that, there are rumors that China is planning a massive stimulus package and maybe lowering their domestic income tax, as well as their VAT tax.?
Grossman adds, ?It is encouraging to see China going to South America and then watching Argentina turn around and buy from the U.S.? However, he reminds producers that all of these bullish factors are rumors, and nothing has been confirmed.
