3 Big Things Today, November 22
1. Soybeans, Grains Slightly Higher Overnight Ahead of Thanksgiving Holiday
Soybeans and grains were higher overnight amid low volume ahead of Thanksgiving.
The Chicago Board of Trade will be open normal hours today, closed tomorrow, and then close early on Friday.
Fundamentally, there’s some concern about dry weather affecting crops in Argentina, and the potential for a La Niña to develop, which may bring warmer and drier conditions to South America, which generally helps corn and soybean prices.
Technically, the record net-short position also has some investors nervous as many aren’t sure they want to lean the ship to the short side any more than it already is, analysts said.
Soybean futures for January delivery rose 4½ cents to $9.93½ a bushel overnight on the Chicago Board of Trade. Soymeal added $1.40 to $319.70 a short ton, and soy oil gained 0.23¢ to 34.40¢ a pound.
Corn futures for December delivery rose ¼¢ to $3.45¼ a bushel overnight.
Wheat futures gained 1¢ to $4.42¼ a bushel in Chicago. Kansas City futures added 1½¢ to $4.39¼ a bushel.
2. U.S. Trade Representative Lighthizer ‘Concerned’ About Lack of Movement in NAFTA Talks
U.S. Trade Representative Robert Lighthizer said after the end of the fifth round of talks to renegotiate the North American Free Trade Agreement that he’s worried about the trajectory of the meetings.
“While we have made progress on some of our efforts to modernize NAFTA, I remain concerned about the lack of headway,” he said in a statement. “Thus far, we have seen no evidence that Canada or Mexico is willing to seriously engage on provisions that will lead to a rebalanced agreement. Absent rebalancing, we will not reach a satisfactory result.”
While Lighthizer didn’t specify what “a satisfactory result” would entail, exactly, President Trump has threatened in the past to end America’s involvement in the pact if attempts to renegotiate fall through. That would have a profound impact on agricultural trade between the U.S., Mexico, and Canada.
In 2016, U.S. agricultural exports to Mexico were valued at almost $18 billion and shipments to Canada totaled more than $25 billion. Imports from the countries totaled $24.7 billion and $24.9 billion, respectively.
Midwestern states, however, fared better than some of their counterparts. Exports from Iowa, Nebraska, Missouri, and Kansas to Mexico each exceeded $1 billion since the country imports a lot of corn, but flows into the states were small, according to Sebastien Pouliot from Iowa State University.
Pouliot said in a report titled “The Importance of NAFTA for the Agricultural Sector” that agriculture likely isn’t the “major obstacle” with regard to the talks, and noted that many farm organizations have voiced support for the agreement. After yesterday, however, it seems unlikely that a deal will be struck anytime soon.
“Trade talks are notoriously slow and agriculture is typically a major point of contention,” Pouliot said. “However, agriculture may not be a major obstacle in the current NAFTA negotiations. “Nonetheless, there are certain agricultural trade issues that are likely to be sensitive.”
3. Weather Mostly Quiet in Midwest as Flooding Recedes in East; Cold Weather Hitting North
The weather maps are again quiet this morning as parts of Indiana and Ohio continue to dry out after weekend rains left rivers and streams over their banks.
The amount of flooding in the two states has declined over the past couple of days, but flood warnings still exist in some areas. The good news is there’s still no rain in the forecast, at least through the end of the week, so that will give affected areas a chance to dry out, according to the National Weather Service.
Some snowfall is expected in the northern Plains and Great Lakes regions as extremely cold air moves in, the NWS said.
Light snow is expected in parts of Minnesota and Wisconsin, and some freezing rain is in the forecast for Thursday evening in parts of Minnesota.
Otherwise, much of the Corn Belt is expected to be dry for through the end of the week, according to the agency.