Wheat, corn and soy fall as market anticipates Trump win
Adds analyst comment, updates prices
CANBERRA, Nov 6 (Reuters) -Chicago wheat, corn and soybean futures fell sharply on Wednesday as early results from the U.S. presidential election put Donald Trump in the lead, raising prospects of new trade barriers and boosting the dollar.
Trump, the Republican candidate, wasdrawing more support than he did in his failed 2020 campaign, though the result remained unclear in most of the battleground states that will decide the winner.
Markets did not wait. U.S. stock futures, Treasury yields and the dollar gained sharply and most commodities lost ground. MKTS/GLOB FRX/ USD=
Tariffs proposed by Trump could disrupt U.S. agricultural trade,U.S. farmers fear. A stronger dollar makes U.S. farm exports costlier for overseas buyers.
"A trade war with China is now more of a possibility," said Ole Houe, director of advisory services at IKON Commodities in Sydney.
But even if Trump wins, prices would quickly rebound, he said.
"The market will initially trade the trade but claw it all back within a week... There's plenty of demand for wheat and feed grain in the world. Soybeans are fairly priced, but wheat and corn are too cheap."
The most-active wheat contract on the Chicago Board of Trade Wv1 had fallen 1.5% to $5.63-3/4 a bushel at 0459 GMT, with CBOT soybeans Sv1 1.9% lower at $9.83 a bushel and corn Cv1 down 0.9% at $4.14-3/4 a bushel.
All three contracts have regained some ground since hitting four-year lows in recent months.
Bumper U.S. corn and soybean harvests and improving conditions in U.S. winter wheat areas have pressured prices but the harvests are now winding up and other key wheat regions, such as the Black Sea and Australia, are dry, analysts said.
Markets are also looking forward to a U.S. interest rate decision on Thursday and crop forecasts from the U.S. Department of Agriculture (USDA) on Friday.
Reporting by Peter Hobson; Editing by Sumana Nandy
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
