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3 Big Things Today, October 17
1. Crop Futures Little Changed in Overnight Trading Wednesday
Crop futures were little changed overnight as investors weight better harvest weather against strong demand for corn.
The pace of harvest in the U.S. is expected to accelerate due to dry weather in parts of the Corn Belt this week, analysts said.
The soybean harvest was 38% complete as of Sunday, well behind the average for this time of year of 53%. Corn collection, meanwhile, was 39% finished, which is just ahead of the prior five-year average of 35%, the USDA said earlier this week.
Export sales of corn have been going well since the start of the marketing year on September 1.
Accumulated exports since then are up 67% year over year, while commitments for future deliveries have jumped 51%, the USDA said. That compares to commitments from overseas buyers to take U.S. soybeans and wheat, both of which are down 18% on an annual basis.
Soybeans for November delivery were unchanged at $8.84¾ a bushel overnight on the Chicago Board of Trade. Soy meal futures rose 40¢ a short ton, and soy oil gained 0.11¢ to 29.77¢ a pound.
Corn for December delivery rose ¼¢ to $3.75½ a bushel overnight.
Wheat for December delivery dropped 3¼¢ to $5.20¼ a bushel overnight, while Kansas City futures fell 2¾¢ a bushel.
2. U.S. Trade Representative Announces Intentions to Begin Talks with Japan, EU, U.K.
Fresh off making deals with Mexico and Canada, the U.S. Trade Representative notified Congress in three separate letters that it will initiate negotiations with Japan, the European Union, and the U.K.
USTR Robert Lighthizer said in a statement that the U.S. plans to expand trade and investment by negotiation the trade agreements. The trade representative is required by law to notify Congress of its intentions with regard to such agreements.
“We are committed to concluding these negotiations with timely and substantive results for American workers, farmers, ranchers, and businesses,” he said.
Japan was the fourth-largest export market for U.S. agricultural products in 2017, which had a value of $12 billion. The Asian country is the fourth-biggest destination for all U.S. goods and imported $67.6 billion in total, the USTR said.
Still, Lighthizer said in his letter to Congress that exporters have been hit by tariff and nontariff barriers, which has led to “chronic” trade imbalances with Japan. The U.S.’s trade deficit with Japan totaled $68.9 billion last year, but that was mostly unchanged from the prior year.
Lighthizer said pretty much the exact same thing in his letter about the EU, using the word “chronic” to describe trade imbalances
The United Kingdom, meanwhile, isn’t yet able to negotiate formal trade deals until it has formally left the European Union, which is slated for March 29. Still, trade officials from both nations have been working to ensure the U.K.’s departure from the EU next year is seamless in terms of trade.
U.S. negotiators will formally kick off negotiations with the U.K. on that date, the letter said.
“The United States and the United Kingdom are the first- and fifth-largest economies in the world, respectively, and maintain a broad and deep trade and investment relationship,” Lighthizer said. “An ambitious trade agreement between our two countries could further expand this relationship by removing existing goods and services tariff and nontariff trade barriers and by developing further cutting-edge obligations for emerging sectors where U.S. and U.K. innovators and entrepreneurs are most competitive.”
3. Cold Weather Moves East Into Indiana, Michigan, Ohio; Flooding in Texas
The extreme cold weather that had enveloped much of the central Midwest earlier this week has now moved east into Indiana, Michigan, and Ohio, according to the National Weather Service.
Freeze warnings are in effect for all three states, so those heading out to harvest their fields need to bundle up. Temperatures in the area are expected to drop into the upper 20s and lower 30s by Thursday morning, the NWS said in a report early Wednesday morning..
A frost advisory has been issued for parts of southern Illinois and southern Indiana, as temperatures there are expected to be as low as 31˚F. overnight, the agency said.
Farther south in Texas, flash flood watches are in effect for counties in the middle of the state. Excessive rainfall the past few days has pushed waterways over their banks. At least one person was killed by raging waters.
“Additional showers with moderate to heavy rain on already-saturated ground will produce runoff,” the NWS said. “Lower water crossings and city streets may flood quickly. Creeks and streams may fill or overflow with swiftly flowing water.”