July 26, 2018
Prices on the CBOT are trading higher after President Trump and EU Commission President agreed to hold off on any new tariffs. However, it was the comment from Mr. Trump that the EU had agreed to “buy a lot of soybeans” that has the bean shorts running for the exits. No one really knows what “a lot of soybeans” means in terms of actual numbers, but the trade definitely viewed the news as bullish as the beans gapped higher and rallied to sharp gains. Corn has followed suit gapping higher, as well, with wheat also trading higher.
The comments from the President were a welcome change and have helped to breathe new life back into the markets. This news makes perfect economic sense for the EU with new crop soybeans out of the Gulf being offered at a $2 per bu. discount to Brazil. Rest assured the EU and everyone else will buy almost every soybean they need from the US so as long as the trade war between the US and China continues.
The EU and GFS models are back in good agreement on the 10-day outlook in calling for a broad ridge/trough pattern to continue through the first week of August. The pattern is expected to bring seasonally cool temps and below normal rainfall to the N. Midwest.
Producers with old crop corn and soybeans to move should take advantage of this news and rally by making sales!
Have a Safe Day!