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3 Big Things Today, May 16

Wheat Futures Rise in Overnight Trading; NAFTA’s Soft Deadline Likely to Be Missed.

1. Wheat Higher Overnight on Dry U.S., Australian Weather

Wheat futures were higher in overnight trading on adverse weather globally.

The drought in the Southern Plains is severe with much of hard red winter wheat country – southwestern Kansas and the Oklahoma and Texas panhandles – suffering from an exceptional or extreme drought, the worst ratings possible, according to the U.S. Drought Monitor.

Parts of the region have received little or no rain in at least the past six months.

It’s not just the U.S. growers who are suffering from a severe drought. Producers in Australia, a major exporting country, also are in desperate need of rain for a second consecutive growing season.

Commodity Weather Group said the next best chance for rain in some Australian growing areas won’t be until next month.  

Wheat for July delivery rose 3¼¢ to $4.96¾ a bushel overnight on the Chicago Board of Trade, while Kansas City futures added 3¾¢ to $5.13½ a bushel.

Corn futures gained 1½¢ to $4.03¾ a bushel overnight.

Soybean futures for July delivery fell 4¾¢ to $10.14 a bushel. Soy meal futures lost $1.40 to $380.90 a short ton, and soy oil dropped 0.18¢ to 30.94¢ a pound.

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2. NAFTA’s Soft Deadline Likely to Be Missed as Negotiations Continue                                            

House Speaker Paul Ryan had set this Thursday as an unofficial deadline for negotiators from the U.S., Canada, and Mexico to hammer out a new North American Free Trade Agreement, but it seems that target will be missed.

Ildefonso Guajardo, Mexico’s secretary of economy, said yesterday it was unlikely a deal would be struck by Thursday, as the country was unhappy with a proposed five-year sunset clause and elimination of the agreement’s dispute-resolution process.

The date isn’t official, meaning there’s still a chance a deal would be reached this year, but with Mexico’s July 1 presidential and congressional elections and the U.S. midterms looming, legislators are concerned their respective governments won’t have time – in the event of a changing of the guard – to pass any newly struck agreement.

U.S. Trade Representative Robert Lighthizer, Mexico’s Guajardo, and Canada Foreign Affairs Minister Chrystia Freeland met last week to discuss the agreement.

On Monday, Lighthizer released a statement saying that talks have been ongoing to build on the seven rounds of negotiations that started in August. The discussions have included issues ranging from intellectual property to agriculture to energy, he said, calling NAFTA “a seriously flawed trade deal.”

Still, the U.S. will continue working to “achieve needed breakthroughs” and be fully engaged to come to an agreement with its neighbors, Lighthizer said.

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3. Thunderstorms Likely to Bring Severe Weather to Parts of Nebraska, Texas

Isolated thunderstorms are likely today in parts of east-central Nebraska with hail and damaging winds likely, according to the National Weather Service.

The storms are expected to continue Thursday and Friday, the NWS said in a report early Wednesday morning. Large hail, wind damage, and locally heavy rainfall are all expected.

Rainfall totals of 1 to 2 inches are expected with up to 5 inches forecast for some locations.

Farther south, a thunderstorm was tracking through the Texas panhandle, just south of Amarillo, reportedly dropping nickel-size hail and pushing wind gusts up to 50 mph, the agency said.

The storms are expected to worsen this afternoon with winds of up to 80 mph and baseball-size hail in the forecast, according to the NWS.

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