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Maybe the windows were a bit foggy this morning as a traveled over to the office, but I thought for sure I saw an Ark being constructed out in a waterlogged field. At least I did not see any animals walking side by side. Here in our section of Northern Illinois, we were doused with another 1 ½ to 2 inches of rain bringing the tallies for the month of June into the 8 to 9-inch realm. Needless to say, we could use a few dry days and a little sunshine. While I would not suggest that these soppy conditions are the only things that have prompted a little buying interest this morning it has probably helped.
It may be premature to begin feeling optimistic just yet, but some of the stories circulating from Washington concerning the trade issues with China would almost offer a glimmer of hope. Instead of pushing for more sanctions via tariffs, etc., and hopefully backing away from others, the White House now says that the Committees on Foreign Investment or Cfius, could begin reviewing and implementing more stringent rules on Chinese investment in U.S. companies. Specifically, targeted would be sectors such as artificial intelligence and robotics. Isn’t this what much of the battle is about anyway. While it would be nice to think that this possible change in tactic was inspired by a recognition that trade wars and tariffs have a miserable historical record of accomplishing anything more than punishing the wrong people, but it would appear that the backlash both from the business as well as the political world is being heard and the heart palpitation suffered in the equity markets a couple of days ago provided the wakeup call. Too bad a collapse in ag commodities does not carry that kind of influence. Regardless, it may be that voices such as Treasury Secretary Steve Mnuchin, who is not a fan of the tariff approach, could finally be heard over the shouts of trade hawks such as Peter Navarro, Robert Lighthizer, and Wilbur Ross, and that would be a reason for encouragement.
Ag secretary Purdue once again reiterated that the U.S. government will be there with backup support by the fall if the trade dispute(s) are not settled soon. He was again a bit short on details but said the Commodity Credit Corp would be playing a role. Does this mean deficiency payments and reserve storage programs are in our future?
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