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It is a pleasant change to be greeted on a Monday morning with a little encouraging news, particularly after a less than positive government report the previous Friday. The word from Washington is that just before the carriage was ready to turn back into a pumpkin, leaving the Canadian negotiators stranded without a ride home and certainly no glass slippers, a deal or at least the framework for a new NAFTA deal have been agreed to. Chalk one up for the Trump administration. While details are still to be released, the joint statement tells it that it will “result in freer markets, fairer trade and robust economic growth in our region.” From what I have read so far, U.S. farmers will now have access to 3.5% of the Canadian domestic milk market. This news provided a bit more buying interest in corn than it did soy, but it would appear that the rising tide has now lifted all the boats.
More updates from South America and AgRural now reports they estimate that 4.6% of the Brazilian bean crop is planted. This compares with 1.5% planted last year at this date and an average of 2.1%. They also estimate that the first season corn crop is 33% planted compared with 23% last year and an average of 26%.
It appears that managed funds were steadily reducing their short holding in corn and beans, which also means the stocks report last Friday came as an unpleasant surprise. For the week ending the 25th, they had bought back over 28,000 contract of corn and 11,000 contracts of beans leaving them short around 113,000 contracts and 59,000 contracts respectively. They were flat in wheat and remain short around 1,000 contracts. Keep in minds that funds were sellers again Friday after the report was issued. As a recap, the USDA came in around 140 million bushels higher than expected in corn and around 40 million higher in beans. In the bean figure, 19 million came via a boost in last year’s production.
As I commented initially, the good news of a new and improved NAFTA agreement appears to have overshadowed the stocks report. Could it be that some presume that once this hurdle has been cleared, negotiations with China will be next? Of course, for that to be the case, the two nations will at least have to agree to meet.
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