Market analysts forecasted a choppy, back and forth trading week.
However, news from China made for an interesting Monday.
Grain markets opened lower Monday, as global trade tensions heightened. Brian Grossman, market strategist with Zaner Ag Hedge, says mixed signals, coming from China, sent grain prices on a “rollercoaster ride.”
“We saw the hammer come down last week with an increase in tariffs. Now, a lot of mixed news today (Monday) as to what China is saying. There was the early rumor that China ordered all of their grain buyers to stop buying U.S. grain. It seems that is getting back-pedalled, and we are seeing a fairly decent reversal in the market,” Grossman said.
But that is not all. China also let its currency slip over the weekend.
“The big news that has been shaking commodities over the weekend (is) China allowed their currency to drop below seven points from the U.S. That was a big move for them,” Grossman said. “They normally keep it pegged tightly to the U.S., within a range. Allowing it to go away from that shows they could be trying to take a currency war approach to what has been just a trade war.”
Grossman says, “We may have found the mid-term low, and could set a firmer tone ahead of the August World Agricultural Supply and Demand (WASDE) report.” However, he reminds producers of our seasonal selloff.
“We’re going to have to be aware that we may not have yet seen our lows. I won’t be surprised if we continue to go down after the August WASDE, if there’s nothing exceptionally bullish in that report. There is a lot of old crop grain carried over. However, that does not change the possibility of a big harvest surprise,” Grossman said.