Headlines:
- Cargill profits growth to slow – but has ‘firepower for deals’ nonetheless
Cargill’s profits growth is poised to slow, undermined by a retreat in meat processing margins – but that does not mean that the company lacks the firepower for acquisitions, potentially “larger” ones, Fitch Ratings said. Cargill – the largest US-based agricultural trader, and one of the biggest privately-owned companies – last month unveiled a 57% jump to $1.03bn in operating profits for the June-to-November half, the group saying that profits rose “notably” in its animal nutrition and protein division.
- Soybean prices rise on Chinese support
Chinese buying spurred soybean markets higher, while corn futures saw a technically-driven sell-off. Soybean markets got off to a bullish start, as Chinese market rallied after came back from the Lunar New Year holiday. “China is back from their week-long holiday, and it looks as though oilseeds are being bought around the globe,” said Tregg Cronin, at Halo Commodities. “The soybean complex is still finding support with international demand, especially coming from Asia,” Agritel said.
Summary:
Demand for US Soybean made for strength in Beans today. The Asian markets are back from New Year’s celebrations and the end result was a 10.50 cent gain for Bean futures. Reports show that Soymeal has been in low supply in China and that US Ethanol producers have been procuring biofuels at record levels. US Ethanol production has been at record level for 4 of the last 5 weeks which has made for price stability in Corn. Today Corn was down 1.50 cents. Wheat was the weakest market today losing 7.25 cents and remaining above the low that was made on January 31st would go a long way in showing the potential for continued strength. Breaking that low could mean that the advance if any would be long and drawn out. The commitment of traders’ report indicates that managed money might be backing off of their bullish tone a bit. Speculative traders reduced their net-long positions of Soybean contracts by about 26.5k contracts down to 159,467. The net-long position for Corn was down almost 13k contract to 4.8 contracts. There were net-short soft-red winter Wheat 107.7k contracts. Up about 3.5k contract.
Fear of trade wars continue to loom but until negations commence, making trading decisions on what “could happen” would be making decisions on pure speculation.
