Friday's Market Minute: Grain Pain After Trade Truce

Soybean bulls hoping for an upward jolt to break out of a recent consolidation range likely were disappointed this week. Agricultural futures moved lower this week, despite the Trade War Phase 1 deal between the U.S. and China as well as the passage of the USMCA agreement in the Senate – deals that should result in greater exports for U.S. producers.

However, the /ZS futures contract wilted on Wednesday amid China’s pledge to buy $40 billion of U.S. agricultural products as part of the deal, breaking support near 940 before stabilizing near 923 this morning after a roughly 2% decline. Corn futures also made a dismal showing on Thursday, as sideways movement that has persisted since mid-December was shaken up with a 2.9% drop that took out last week’s lows.

The /ZC contract crossed and closed far below its 21/64/252 exponential moving averages as well in one fell swoop, which suggests continued weakness may be on the horizon.

Image by Євген Литвиненко from Pixabay