Soybeans Rise on Speculation of Chinese Buying
July 19 2019 - 3:21PM
Dow Jones News
By Kirk Maltais
--Soybeans for November delivery rose 2.3% to $9.19 1/4 a bushel
on the Chicago Board of Trade Friday, as traders reacted to talk of
Chinese state buyers purchasing large soybean lots.
--Wheat for September delivery rose 1.8% to $5.02 1/2 a
bushel.
--Corn for December delivery rose 1.4% to $4.35 3/4 a
bushel.
HIGHLIGHTS
Healthy Dose of Skepticism: Although the rise in soybeans
futures shows optimism among some traders and investors that China
is returning to the negotiation table, other agricultural research
firms maintained healthy doubts that Chinese state buyers will pull
the trigger on large purchases, contending that they haven't seen
any evidence of them. "[We] cannot find any cash confirmation of
such purchases," said AgResource.
Short-Covering Rally: Traders and funds alike looked to cover
any open short positions following this week's downward momentum as
moderating temperatures in the Corn Belt weakened expectations for
additional crop damage. "A significant amount of risk premium has
been taken out of the market this week and now some of this is
being replaced," said Karl Setzer of AgriVisor.
INSIGHT
Where's the Heat?: Corn futures have had a down week as
expectations of extreme heat coming to the Corn Belt don't seem to
be panning out. However, the downturn is likely temporary due to
earlier damage from flooding, says Doug Bergman of RCM
Alternatives. "I don't think the historic weather event that
impacted planting this year has been completely priced in," he
said. Mr. Bergman added that he expects traders to do more buying
in trading next week.
Back to the Table: A Thursday teleconference with Chinese
officials and U.S. Treasury Secretary Steven Mnuchin was of keen
interest to soybean traders, but no news has emerged of how the
talks went. Despite a doubtful outlook by many traders, the rumor
of more Chinese buying of soybeans offset the otherwise negative
view.
Syngenta Gets Soaked: Persistent rain and flooding that raked
the U.S. Midwest over the spring contributed to a 34% drop in
first-half profits for Syngenta, as farmers were forced to skip
pesticide spraying and in some cases left rain-saturated fields
unplanted altogether. Syngenta's North America pesticide sales fell
14% and seed sales fell 16% declined from the prior year, the
Swiss-based, Chinese-owned agriculture company said, pushing
overall net income to $798 million for the period, versus $1.21
billion in 2018.
AHEAD
--The USDA releases its weekly grain export inspections data at
11 a.m. EDT Monday.
--The USDA provides its weekly update on U.S. crop progress at 4
p.m. EDT Monday.
Jacob Bunge contributed to this article.
(END) Dow Jones Newswires
July 19, 2019 16:06 ET (20:06 GMT)
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