Grains, Between Trump Tweets and Harsh Weather ConditionsThe United States Department of Agriculture reported the crop conditions for the last week. Corn was rated 58% good or excellent as of last Sunday. Up from 57% the previous week, but well behind the 72% rating this time last year.
Grains such as soybeans, corn, and wheat are performing a turnaround Tuesday as the three are posting losses on the day. Investors are digesting crop conditions, China’s epidemic of African swine fever, and Trump tweets.
Crop conditions don’t improve in the U.S.
The United States Department of Agriculture reported the crop conditions for the last week. Corn was rated 58% good or excellent as of last Sunday. Up from 57% the previous week, but well behind the 72% rating this time last year.
Soybeans were rated 54% good or excellent, unchanged from the previous week but also below last year average.
China would face a 50% decline in pig herds
The epidemic of African swine fever would take a toll for the whole Chinese farming and food economy with a possible reduction to half of the pig herds according to a forecast published by analysts at Dutch bank Rabobank.
The incendiary forecast says that forecast was already ugly last year with their inform reporting a possible 40% decline by this time. However, now, Rabobank is watching harder conditions. All of that well above official estimates of a reduction of 15-26%.
Trump tweets again
Just ahead the start of new talks, U.S. President Donald Trump tweeted complaining against China lack of purchases they were “supposed” to start.
“China is doing very badly, worst year in 27 – was supposed to start buying our agricultural product now – no signs that they are doing so.” Trump tweeted. “That is the problem with China, they just don’t come through. Our Economy has become MUCH larger than the Chinese Economy is last 3 years.”
The tweet comes as the talks are about to start in the middle of overall pessimism in both teams.
Trump is also trying to link Chinese negotiations to the next electoral cycle which will elect, or reelect, president in 2020.
Soybeans down to test 200-day moving average
Soybeans are trading down on Tuesday as investors are digesting harsh weather conditions and possible less demand in China due to the epidemic of African swine fever.
The unit is currently trading 0.55% down on the day as it is moving at 8.790. The unit is now testing the 200-day moving average at 8.780.
Technical conditions are weak and are suggesting more room for the downside. Below the mentioned 8.780, soybean would see supports at 8.700, 8.660, and then the 8.500 area.
To the upside, the 8.900 area is containing the unit with 9.00 as the next resistance.
Wheat unable to break above 50-day moving average, back to losses
Wheat is trading negative on Tuesday as investors were unable to put the grain above the 50-day moving average on Monday. Today, the unit is trading 0.65% down on the day at 4.955.
The grain will face supports at 4.900, the 200-day moving average at 4.865, and 4.800. To the upside, wheat needs to clear above the 5.040 area and then go throughout the 5.100 level.
Corn trades water above 4.080
Prices of corn are trading negative on Tuesday after failing to recover ground on Monday. The unit is moving in a small range between 4.080 and 4.130.
Currently, corn is pricing at 4.090, 2.65% down on the day. Next support is the mentioned 4.080, below there, check for 4.060 and 4.000 as the next frontiers.