After some fireworks late last week, things have quieted down in the grain trade. The latest spark came as China and the United States each slapped new fees on maritime shipping from the other country. It’s another step in the ongoing trade war, but for now, markets seem to be taking it in stride as traders weigh the impact alongside the continued government shutdown.
Garrett Toay with AgTraderTalk says the move is just another notch in the belt of this ongoing trade fight. While the shipping fees themselves may not directly affect grains, the political back-and-forth certainly got some attention. He says the exchange even had President Trump fuming before cooler heads finally stepped in.
Even with all that talk, Toay says the markets barely flinched. Traders didn’t see much reason to react, especially with so little information to work from during the shutdown. He adds that between the government being closed and the beginning of the week’s holiday, it made for an exceptionally quiet start to the week.
Toay says most of his focus right now is on soybeans, and he’s been watching how cash and spreads are reacting as harvest moves along. He notes that this time of year usually brings some slowdown in movement, but those typical market patterns are being made worse by the outside pressures hanging over the trade.
And with the government shutdown dragging on, Toay says traders are keeping their cards close to the vest. Without key reports or position data, most are hesitant to take on much risk until they get a clearer picture of what’s really happening in the market.
Even with the calm start to the week, the uncertainty surrounding trade and the lack of fresh data are keeping everyone on edge. For now, traders seem content to wait and see what comes next from both Washington and Beijing.
