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3 Big Things Today, August 29

Wheat Futures Higher Overnight; Negotiators Turn to Canada After Closing Mexico Deal.

1. Wheat Futures Seek Second Straight Gain on Global Concerns

Wheat futures finally broke their six-day losing streak yesterday and were higher in overnight trading again on concerns about global crops.

Russia’s IKAR consultancy on Tuesday lowered its estimate of the country’s wheat crop to 69.6 million metric tons from a prior projection of 70.8 million tons.  

Egypt, which had been seeking supplies, said it bought 350,000 tons of wheat, including 290,000 tons from Russia and 60,000 tons from Ukraine.

Adverse weather in several producing areas including the European Union and Russia has curbed prospects for global production in recent weeks.

The USDA earlier this month pegged global output at 729.6 million metric tons, down from a prior outlook for 736.3 million tons, lowering production prospects in the EU by 8 million tons.

Wheat futures for December delivery rose 7½¢ to $5.30¾ a bushel overnight on the Chicago Board of Trade. Kansas City futures added 7¢ to $5.34¾ a bushel.

Corn gained ½¢ to $3.56¾ a bushel in Chicago.

Soybean futures added 2¢ to $8.35¼ a bushel overnight. Soy meal futures fell 40¢ to $305.10 a short ton, and soy oil added 0.01¢ to 28.59¢ a pound.

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2. With Mexico Trade Agreement Finished, U.S. Negotiators Turn to Canada

Now that the U.S. and Mexico have come to an agreement on a revamped bilateral trade agreement, all eyes are on talks between the U.S. and Canada, which are entering their second day.

Several U.S. lawmakers including President Trump have said they’d like to see Canada included in what would eventually become a revamped North American Free Trade Agreement (NAFTA), though the president doesn’t want to call it that since it has negative connotations.

Canadian Foreign Minister Chrystia Freeland said on Tuesday that the fact that Mexico was able to reach an agreement with the U.S. opens the door for Canada to also find common ground. She met with U.S. Trade Representative Robert Lighthizer yesterday.

Some of the biggest hurdles to a deal is U.S. insistence on Canada getting rid of a provision that prevents the U.S. from filing antidumping and antisubsidy cases, intellectual property rights, and other copyright protections, according to media reports.

Farm groups said the old NAFTA shouldn’t end until a new trilateral agreement is in place as it guarantees duty-free access to Canada and Mexico for U.S. farm products. The countries are the No. 2 and No. 3 markets for U.S. agriculture, worth more than $40 billion a year.

The U.S. Grains Council said it hopes the deal with Mexico “opens the door” for reengagement with Canada, and that it’s opposed to ending NAFTA until a new trilateral agreement is put in place.

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3. Thunderstorms in Illinois Expected to Give Way to Strong Winds

Thunderstorms are expected to end in parts of central and southern Illinois but give way to strong winds this afternoon.

Brief southerly wind gusts of up to 40 mph or more are expected after the rain ends, according to the National Weather Service.

“Those traveling this morning should be prepared for a quick increase in wind speeds that may not normally be expected, but gusts should not last very long at any one location,” the NWS said in a report early Wednesday morning.

Farther north in west-central Wisconsin, a flood warning is still in effect as several rivers and streams are over their banks due to recent rainfall. Flooding continues across Marquette, Green Lake, Columbia, and Sauk counties and will continue through at least tonight.

Thunderstorms are again possible in the area Friday through Tuesday, according to the NWS.

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