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3 Big Things Today, April 26

Corn, Beans Mixed in Overnight Trading; U.S.-Canada Dairy Row May Be Political Pawn.

1. Corn Modestly Higher, Soybeans Slightly Lower on Conflicting Fundamentals

Corn was modestly higher while soybeans fell in listless trading overnight as investors weigh fast planting against potential demand for U.S. products.

Growers sped planting last week as shown by the Department of Agriculture’s Weekly Progress Report on Monday, taking advantage of dry weather. Corn planting is almost caught up with the average pace and soybeans are well ahead of normal for this time of year, the USDA said.

While that may make the bears happy, bullish investors are looking at weakness in the dollar as a potential impetus for improved demand. Purchases of U.S. goods by overseas buyers were extremely strong early in the season, but they have dropped off recently.

Investors are likely hoping that turns around amid a weaker greenback and relatively low prices.

Corn futures rose a penny to $3.72¾ a bushel overnight on the Chicago Board of Trade.

Soybean futures for July delivery lost 1½¢ to $9.63¾ a bushel in Chicago. Soy meal fell $1.30 to $316.40 a short ton, and soy oil gained 0.22¢ to 32.07¢ a pound.

Wheat futures for July delivery rose 1½¢ to $4.28½ a bushel in Chicago, while Kansas City wheat gained 2¢ to $4.26¾ a bushel.


2. Dairy Row Would’ve Been A Bigger Fight When Canada Industry Was More Politically Powerful

The fight picked by President Trump with the Canadians – the one over milk, not lumber – seems to be a fight against a much smaller opponent than it would’ve been 40 years ago.

The row stems from the 270% tariff put on milk from the U.S. entering Canada. On top of that, our neighbors to the north last year implemented a new strategy on milk ingredients that closed a loophole in the tariff in a bid to get Canadian producers to produce more dairy products such as cheese.

Canada in the 1970s had about 140,000 farms when its supply-management scheme was invented; now it has 11,683. The clout of the industry within Canada’s government packs a much smaller punch than it once did.

The question, of course, is how far either side wants to push the issue.

Trump said in an interview alongside newly confirmed Secretary of Agriculture Sonny Perdue in a presser yesterday that he doesn’t want to start a trade war with Canada, though his recent actions regarding both milk and lumber belie his assertion, and the fact that Canada’s dairy industry is politically weak may make this a short battle.

The president reiterated his statement that American dairy farmers have been unfairly treated by Canada’s tariff on milk and products, and signed an executive order saying he’s “directing Secretary Perdue to work with other members of my cabinet to identify and eliminate unnecessary regulations that hurt our nation’s farmers and rural communities.”

The dairy issue could become a pawn in the lumber game, which at this time seems like a much bigger issue to both sides despite the contribution from both the dairy and lumber industries, accounting for roughly the same amount toward Canada’s gross domestic product. It’ll be interesting, as these things usually are, to see how this one pans out.

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3. Severe Thunderstorms Heading Into Eastern Oklahoma, Arkansas Wednesday Morning

The weather maps are lit up like a Christmas tree this morning in parts of eastern Oklahoma and Texas, almost all of Arkansas, and northern Louisiana.

As much as 1.6 inches of rain are expected in the region, with the largest amounts falling near Fort Smith and Fayetteville, Arkansas.

“Severe thunderstorms will remain possible through early afternoon,” the National Weather Service said in an early report on Wednesday. “An upper-level wave is approaching the area from New Mexico today, and this will allow additional thunderstorms to form within the warm sector along and ahead of a slow-moving cold front. Flash flooding is possible today mainly across far eastern Oklahoma and western Arkansas where recent rains have saturated the soils.”

Elsewhere, a frost advisory is in effect for pretty much all of eastern Nebraska and some extreme northern counties in Kansas and western counties in Iowa, according to the NWS.

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