Wheat Edges Higher as U.S. Grain Finds New Interest
By Kirk Maltais
--Wheat contracts for March delivery rose 0.2% to $5.18 1/4 a bushel on the Chicago Board of Trade on Monday amid signs that foreign buyers are interested in U.S. grain.
--Soybean contracts for March delivery fell 1% to $9.05 a bushel.
--March corn contracts lost 0.4% to $3.72 3/4 a bushel.
Wheat: The USDA said 128,000 metric tons of hard red winter wheat was sold for delivery to Nigeria in the 2018/19 marketing year, with an additional 120,000 tons of soft red winter wheat sold to Egypt for the same timeframe. News of the sales follow projections that Russian wheat exports are decreasing, although Russian officials have yet to institute any sort of export ban, which would be bullish for U.S. wheat.
U.S.-China: Grain markets are watching the trade talks this week. The U.S. delegation arrived in Beijing on Monday, and news reports said President Trump may meet Chinese President Xi Jinping at the Mar-a-Lago resort in Florida in March. The two nations have a March 1 deadline to reach a trade deal. China is a major buyer of U.S. agricultural products, particularly soybeans.
Shutdown Worries: Traders are also keeping an eye on Capitol Hill, where lawmakers are negotiating over border security to avoid another partial federal government shutdown. The government's funding expires at 12:01 a.m. ET Saturday. The last shutdown prompted the USDA to suspend publication of key data, such as export sales and the WASDE.
Soy Story: The most recent WASDE suggests soybean prices may be too high, according to some traders. U.S. soybean inventories are still near record highs, and without China buying it's unlikely the U.S. can sell enough beans to change deplete those stocks, the traders said. "It is very difficult to see soybeans trading $9.10 in March and $9.50 in November if the carryout is (910 million bushels)," said Craig Turner of Daniel's Trading. "Based on those numbers by themselves soybeans should be 50 cents lower." Traders will be watching Brazilian data to see if production there might shrink, which could make U.S. soybeans more attractive to China.
--Brazil's Conab releases its latest supply report on Tuesday.
--Pilgrim's Pride reports its fourth-quarter and full-year earnings Wednesday.
--The USDA will release its export sales for the week ended Jan. 3 on Thursday.
Write to Kirk Maltais at email@example.com