China hasn’t yet fulfilled the conditions of the trade deal with the US
China’s purchase of US grains and soybeans under the Phase 1 of the trade deal may be the main factor behind the possible increase in US grain and soybean prices. The US and China signed it at the beginning of this year. Under this agreement, China pledged to purchase US agricultural commodities worth $36.5 billion in 2020. However, due to the coronavirus pandemic, it purchased food for only $ 8.6 billion in January-July. Of course, there is a risk that China will not fully comply with the terms of the trade deal. In particular, the U.S. Department of Agriculture Secretary Sonny Perdue warned about this. However, if China does start to increase US grain purchases, this could be an additional boost to price increases.The second factor in their possible growth is the low grain harvest in the US Midwest this year due to heavy rains and spring floods.
Summary of technical analysis
|Buy stop||Above 408|
|Stop loss||Below 380|
Market Analysis provided by IFCMarkets.com