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Commodities: Agriculture futures jump back on trade deal hopes

23-05-2018 20:27

Agriculture futures were again seeing strong gains on Wednesday, ignoring upwards pressure on the US dollar, as is often the case.
Triggering the latest move in the Greenback were comments from US President Donald Trump overnight indicating he was not "happy" with the ongoing trade talks with China.

However, come Wednesday morning he appeared to adopt a less critical tone, saying via Twitter that the deal was "moving along nicely".

In previous remarks the President had emphasised how US farming would be one of the big beneficiaries of any agreement.

Against that backdrop, as of 1932 BST July 2018 corn futures on CBoT were making gains of 0.93% to $4.0850 a bushel, alongside a 1.82% jump in similarly-dated wheat contracts.

Live cattle futures were also on the front foot, trading higher by 2.14% on the CME to reach $1.0280 a pound.

Most LME base metals on the other hand finished lower, weighed down by dollar strength, with three-month LME copper ending at $6,867 per metric tonne after opening at $6,957 per tonne.

Gold however managed to retain a bid, trading higher by 0.12% to $1,299/oz. on COMEX.

Indeed, dollar strength wasn't just about China but also about North Korea.

On Tuesday, Trump had also cautioned there were no guarantees that a 12 June summit with the country's leader, Kim Jong Un, would finally go ahead.

Following through on those remarks, on Wednesday, US Secretary of State, Mike Pompeo, said he hoped the talks would take place but that the ball was in Pyongyang's court.

Energy futures were mixed meanwhile, after America's Department of Energy reported that the country's commercial oil inventories jumped by 5.8m barrels a day over the previous week, as net imports rocketed back.

Together with the moves in the Dollar, that saw front WTI crude oil futures on NYMEX slip 0.69% to $71.70 a barrel.