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3 Big Things Today, June 13
1. Wheat Lower as Southern Plains Gets One Last Shot of Rain
Wheat futures were lower in overnight trading on rainy weather in the Southern Plains that may give some of the hard red winter crop one last shot before being harvested.
In the Oklahoma panhandle, there’s a 65% chance of rainfall today. While the crop is mostly finished in some areas, one more round of rainfall couldn’t hurt plants that saw little to no rain throughout the growing season.
Market-watchers are also bearish after the USDA on Tuesday raised its estimate of U.S. wheat production for the 2018-2019 marketing year that started on June 1 to 1.827 billion bushels from the prior month’s forecast for 1.821 billion.
Ending stockpiles were still pegged lower at 946 million bushels from the previous outlook for 955 million, according to the USDA.
Soybeans declined overnight on scant Chinese demand for U.S. inventories. Analysts told Reuters that buyers from the Asian country, traditionally the biggest customer for soybean exporters, have turned to Brazil for supplies.
Wheat for July delivery dropped 7½¢ to $5.27 a bushel overnight on the Chicago Board of Trade, while Kansas City futures lost 7¢ to $5.46½ a bushel.
Soybean futures for July delivery fell 9¢ to $9.45 a bushel overnight. Soy meal declined $3.30 to $350.20 a short ton, and soy oil rose 0.11¢ to 30.16¢ a pound.
Corn futures for July delivery fell 2¢ to $3.75½ a bushel overnight.
2. NAFTA Comes to Screeching Halt After Tariffs, G7 Dustup
North American Free Trade Agreement negotiations were slowed after U.S. President Trump enacted tariffs on steel and aluminum imports from Canada and Mexico, along with the European Union, and it came to a screeching halt after last week’s Group of Seven meeting in Quebec.
Tensions flared between the president and world leaders – namely Canadian Prime Minister Justin Trudeau – as Trump complained about “unfair” trade practices facing the U.S. He arrived late to meetings, expressed little interest in negotiating, and exited early.
The fate of a renewed trade agreement was already in limbo before the G7 meeting as it was likely too late to renegotiate since the U.S. midterms are in November and the Mexican presidential election is on July 1.
The front-runner of the Mexican race, Andres Manuel Lopez Obrador, said during a debate yesterday that the end of NAFTA wouldn’t be “fatal” for Mexico, as the country has vast natural resources. He said he would help revive the farm economy if elected and if trade negotiations failed to bear fruit.
After last week’s meeting, Trudeau said Canada wouldn’t be pushed around and confirmed that the government would move forward with proposed tariffs on U.S. goods.
Still, there’s hope for the trade agreement yet, as Canada Foreign Affairs Minister Chrystia Freeland is heading to Washington to speak to U.S. lawmakers and accept an award for Diplomat of the Year by Foreign Policy Magazine.
CBC said in a report that she likely won’t lash out at Trump and others who’ve criticized Canada and Trudeau, but she likely will promote multilateralism and opposition to the U.S. steel and aluminum tariffs.
3. Flash Flood Threats Subside in Illinois, Iowa, Some Areas Remain Under Watch
The threat of flooding has subsided in central Illinois as storms that pounded the area for the past few days moved on.
Some flood warnings remain in the state, however, as rivers and streams near Champaign and farther south along the Indiana border are still over their banks, according to the National Weather Service.
Still, only spotty thunderstorms are forecast for the area, an improvement from a weather system that dropped several inches of rain per hour in some regions, the NWS said in a report early Wednesday morning.
Flood warnings are still in effect near Waterloo, Iowa, and areas near Cedar Rapids, just east of Iowa City and east to Clinton along the state’s border with Illinois.
The Cedar River near Conesville is at 11.6 feet and is expected to hit 13 feet by Thursday morning. It will likely drop back below flood stage by Sunday, the NWS said.