Headlines:

  • Cotton futures soar limit up, defying broad market calm
    Investors complaining about the lack of volatility in financial markets overlooked cotton. While the VIX index of expected US equity turbulence — often termed the “fear index” — this week closed at a 23-year low, cotton futures, having in the last session notched up their biggest daily gain in 10 months, went even further on Friday. The July cotton contract closed up the exchange maximum of 3.00 cents (3.8%) at 82.18 cents a pound, the highest level in nearly three years for a spot contact.
  • US regains access for beef exports to huge Chinese market
    China is ready to start importing US beef for the first time in 14 years, following last month’s trade talks between president Donald Trump and Chinese premier Xi Jinping at Trump’s Florida beach resort. The Chinese authorities imposed an import ban on US beef in 2003, following a case of BSE in Washington State, although this was lifted last year. A Trump campaign pledge was to overturn unfair trade barriers at the same time as reducing the US burgeoning trade deficit with China. The deal, which should start no later than mid-July, is subject to further technical talks on import standards, would allow US beef and card payment services access to the Chinese market. In return, the US has agreed to open up to imports of cooked chicken products from China.

Summary:

The United States and China have committed to taking action over the course of 100 days (by mid-July) to expand trade in chicken and beef, to increase access for US financial firms and to take additional measures to help the US cut its trade deficit with Beijing. The trade talks began last month when President Trump met with the Chines President Xi Jinping. Despite all the challenges that seem to surround this administration, they just keep finding ways to be productive and focus on growing the US economy. Trump had pledged during his presidential campaign that he would stop trade practices by China and other countries that he deemed unfair to the US. He is doing his best to deliver on his promises.

Soybean futures closed slightly lower while Wheat finished down a couple of ticks. Even with the WASDE report showing large old crop inventories, Corn continues to find price support and managed to buck the action of its counterparts and finish in positive territory today. Disruptive wet weather has still been causing delays and in turn has translated into price stability. Recent cold, wet field conditions and fluctuations in soil temperatures have put early-planted corn at risk for seedling disease, and there may be considerations for replant in some areas.