Markets are a little stronger this am with corn up 3 and soybeans up 2. The US Dollar is higher at 100.15, the Dow is up 500 points and crude oil is up $5.25 to $25.50 after China announce they would buy crude oil for their strategic reserves.
Oil prices have jumped on expectations Saudi Arabia and Russia will ease the pressure off the oil market. Crude oil is up nearly 20% on the day to trade back above $24 a barrel after President Trump told CNBC’s Joe Kernen he spoke with Russian President Putin and Saudi Crown Prince Bin Salman, adding he expects both countries to cut production by about 10M barrels.
The news of Beijing pledging to take advantage of the 60% decline in crude oil prices to increase their strategic reserves has helped place a bid beneath the corn market this morning. The idea is that the Chinese intend on securing enough oil for about 90 days or somewhere in the area of 900M barrels. President Trump will meet with US oil industry executives tomorrow. The trade will be watching China closely in terms of their buying.
Look for choppy grain trade continues as the break in prices at the end of last month starts to uncover new buyers as we head into a new month and quarter. The combination of the Chinese decision to buy crude and the potential truce between the Saudis and Russians in their price war likely provides some measure of confidence to traders that was clearly lacking yesterday.
Have a Safe Day!