Trade news made waves over the weekend, boosting the grain market to kick off the week of Dec. 3.
With an early bounce in the market due to reports of the U.S. and China reaching a temporary truce on their trade war, the commodities held well initially, Jack Scoville of the Price Futures Group said Monday morning, leading to hopes the market may have found some stability.
“The fact they’ve been able to hold here is a pretty good sign,” Scoville said. “I think you can look at the grains as a market that has seen some stability. We are kind of in a sideways range now, it looks like we are going to continue to develop it.
“It’s true as much for the corn and wheat as anything else. Hopefully we’ll achieve some stability in the beans. Unless we see a lot of business, that’s a market that should be fairly stable as well.”
Scoville said Chinese buying actions in the midst of the reported ceasefire could greatly affect the market.
“If the Chinese come in and buy 5 million tons in one fell swoop, it’ll go back and forth and will be a choppy, sideways affair,” he said.
With trade news dominating the headlines, it could run the market for a little while as traders look to the holiday season, Scoville said.
The holiday season is a time when speculators are pulling some money with Christmas and New Year’s coming up, making it a slower market.
“I think a lot of people did a lot of anticipatory buying ahead of (last) weekend’s events,” Scoville said.
“You’ll see liquidation pressures in the options and futures as we try to rally this thing significantly. Then those people will be slow to come back because it’s the holidays.”
Other factors to keep an eye on include the upcoming WASDE report, slated for release Dec. 10, while harvest finally wraps up amid wet and cold weather.