3 Big Things Today, August 15
1. Soybeans Decline Overnight on Trade War, Rising Output
Soybean futures decline overnight Wednesday as the trade spate between the U.S. and China shows no signs of abating and on increased output forecasts.
The U.S. plans to add tariffs to another $16 billion worth of Chinese goods, and China responded last week by saying it would add duties on an equal amount of U.S. items. The tit-for-tat dispute is at risk of escalating as the U.S. has proposed levies on another $200 billion worth of Chinese imports.
The USDA last week forecast the corn crop at 14.586 billion bushels on yield of 178.4 bushels an acre, up from the prior month’s outlook for 14.23 billion on yield of 174 bushels an acre. Inventories of the grain are seen at 1.684 billion bushels, beating forecasts for 1.636 billion bushels and last month’s estimate of 1.552 billion.
Soybean output was forecast by the USDA at 4.586 billion bushels on yield of 51.6 bushels an acre, up from 4.31 billion bushels and yield of 48.5 bushels an acre. Stockpiles are pegged at 785 million bushels, up from the prior forecast for 580 million and estimates for 638 million bushels.
Soybean futures for November delivery fell 6½¢ to $8.73¼ a bushel overnight on the Chicago Board of Trade. Soy meal futures lost $2.30 to $335.50 a short ton, and soy oil lost 0.23¢ to 28.38¢ a pound.
Corn futures for December delivery lost 2¾¢ to $3.73¾ a bushel in Chicago.
Wheat for September delivery declined 3¢ to $5.55¾ a bushel in Chicago, while Kansas City futures fell 5½¢ to $5.69½ a bushel.
2. Mexico’s Guajardo Heads to Washington to Resume NAFTA Talks
Mexican Economy Minister Idelfonso Guajardo will reportedly head to Washington today to try to hammer out a deal to revamp the North American Free Trade Agreement.
The minister will meet with U.S. Trade Representative Robert Lighthizer for a fourth round of talks in four weeks. Mexico has been more receptive to talks since the election of new President Andres Manuel Lopez Obrador on July 1.
Canada has been conspicuously absent from the recent talks but may join in ensuing days, according to several media reports.
Reuters reported that the one sticking point is President Trump’s desire to reserve the right to impose tariffs on cars made in Mexico.
The Commerce Department launched a probe in May to examine whether imports of automobiles could pose a national security risk.
Trump said recently that the deal with Mexico is “coming along nicely” in a tweet and that the automobile and agriculture industries must be taken care of before a deal is approved.
Guajardo has said that Canada will rejoin talks once a bilateral deal between the U.S. and Mexico is hammered out.
3. Flash Flood Warnings in Effect in Southeastern Kansas, Watches in Oklahoma, Arkansas
Flash flood warnings are in effect for two counties in southern Kansas and watches are in effect for much of eastern Oklahoma and western Arkansas.
Several roads are closed in southeastern Kansas. While most of the rain has stopped or will stop soon, water levels and runoff from earlier precipitation will continue to flood rivers and streams and some roadways, according to the National Weather Service.
In eastern Oklahoma and western Arkansas, multiple rounds of showers and thunderstorms are expected to hammer the area through this evenings, the NWS said in a report early Wednesday morning.
“There will be breaks in the rainfall, but when it is raining, the rainfall rates will be high enough to cause some higher totals,” the agency said. “One to 2 inches with isolated higher amounts of additional rainfall will be possible for far eastern Oklahoma and northwest Arkansas. These rainfall amounts on top of rain that’s already occurred could lead to isolated flash flooding, especially near low-lying areas and smaller creeks and streams.”