US wheat futures markets continued to rally earlier this week, reaching 14-month highs ahead of the US and China signing 'phase one' of their trade deal. Bullish traders were encouraged by the view that, in its part of the agreement, China would make significant purchases of US agricultural products and start buying notable volumes of US wheat.
However, the text of the agreement stated purchases would be made at market prices based on commercial considerations. In other words, wheat purchases would only be made if the wheat was needed and prices were favourable.