Wheat Futures Rise as European Supply Tightens
Wheat for July delivery rose 1.2% to $5.20 3/4 a bushel on the Chicago Board of Trade on Friday, as traders expect a smaller European Union wheat crop in 2020/21. Soybeans for July delivery fell 0.7% to $8.40 3/4 a bushel. Corn for July delivery fell 0.5% to $3.25 3/4 a bushel.
The EU wheat crop will likely decrease by 4 million to 6 million metric tons this year due to excessive dry weather in some areas, making the total EU crop roughly 140 million tons, AgResource said. The USDA estimates the U.S. wheat crop will produce less than half that amount, at 50.8 million tons.
Trump to Pull U.S. From WHO, Among Series of Policy Moves Targeting China
WASHINGTON -- President Trump said the U.S. would terminate its relationship with the World Health Organization, suspend entry for some Chinese foreign nationals whom the U.S. views as a security risk and roll back some of the special preferences the U.S. has granted Hong Kong.
The president on Friday also threatened to put sanctions on Chinese and Hong Kong officials "directly or indirectly involved in eroding Hong Kong's autonomy" after China's legislature on Thursday approved a resolution to impose national-security laws that will restrict the territory's partial autonomy.
The moves, which were in part a response to China's actions on Hong Kong, are likely to further escalate tensions between the U.S. and China as the two nations trade barbs over their responses to the coronavirus pandemic.
Restaurants See Future for Meal Kits Post-Pandemic -- Market Talk
0707 ET - Coronavirus precautions have closed countless restaurants for more than two months. Many are offering delivery or takeout, but some are testing whether customers want to prepare menu items in their own homes. Enter the DIY meal kit. Restaurants from London to New York are deconstructing menu items into ingredients and recipes and sending them in boxes to customers, who are challenged to recreate food they would normally pay someone else to cook. Eateries such as Roberta's in Brooklyn plan to continue the offer once the pandemic is over. Denny's, meanwhile, has ended its trial of DIY meal kits in favor of pre-cooked "Shareable Family Packs." (firstname.lastname@example.org; @dollydeighton)
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Grains Traders Holding Breath for Trump Announcement -- Market Talk
All eyes on the CBOT are focused toward President Trump this morning, as a press conference regarding China today could result in new sanctions on China - troubling news for the continued viability of the Phase One trade agreement signed in January. "There is some fear that the press conference scheduled to be held today by President Trump regarding China and Hong Kong could negatively impact Chinese soybean demand for US beans," says Tomm Pfitzenmaier of Summit Commodity Brokerage. "Much of the strength in the soybean market is predicated on good Chinese demand from the phase-one trade deal and there is some fear that if trade tensions escalate, it could potentially jeopardize the deal." Overnight, soybean futures on the CBOT fell 0.5%. (email@example.com; @kirkmaltais)
Mondelez Monetizes Part of JDE Peet's Stake -- Market Talk
0913 ET - Mondelez International picks up about $339M in the European IPO of JDE Peet's, the coffee and tea company majority-owned by investment firm JAB Holding. Mondelez, which owned a 26% stake in JDE Peet's, sells about 9.66M shares in the IPO, which priced at EUR31.50 a share and valued the company at roughly $17.3B. Mondelez says it will still own 22.9% to 23.4% of JDE Peet's after settlement and depending on exercise of the overallotment option, and says it will retain two board seats on the newly public company. (firstname.lastname@example.org)
'Ring of Fire' Could Hurt US Crops -- Market Talk
11:19 ET - CBOT grains futures fall, especially corn. July corn futures are trading 1.2% lower, with traders worried about what possible sanctions on China by the Trump Administration may mean for the future viability of the Phase One trade agreement. However, longer term, a dry weather pattern going into next month may provide some support for US grain futures. "The seven day forecast models show very little rain across all of the Midwest with the exception of Ohio and portions of southern Wisconsin and far northern Illinois," RJO Futures says. "This 'ring of fire' pattern coming this early in the year will help producers finish planting and will encourage strong emergence. But if the pattern lasts longer, it could become a bullish influence as crop conditions deteriorate." (email@example.com; @kirkmaltais)
Livestock Futures Finish the Week Mixed -- Market Talk
15:55 ET - Livestock futures on the CME finished the day -- and week -- as a mixed picture. Live cattle futures closed down 1.6% to 99.6 cents per pound, while lean hog futures rose 2.5% to 57.025 cents per pound. For cattle, the uptick is somewhat related to elevated cattle slaughters. "A quick look at total cow harvest (beef and dairy type) suggests year-to-date figures are even with a year ago even after several weeks of dampened harvest levels," says Steiner Consulting Group. (firstname.lastname@example.org; @kirkmaltais)