Headlines:

  • Trump Says Too Soon to Talk with China on Trade
    U.S. President Donald Trump on Monday said it was “too soon” for Washington to talk to Beijing about working out a deal on trade, suggesting U.S. tariffs have yet to exert enough pressure to force Beijing into making concessions at the negotiating table. “China wants to talk, very badly, and I said, ‘Frankly, it’s too early to talk.’ Can’t talk now, because they’re not ready,” Trump said during remarks on trade at the White House. “If, politically, people force it too quickly, you’re not going to make the right deal for our workers and for our country.” During his remarks, which focused on a new U.S. trade deal with Canada and Mexico, Trump hailed the power of tariffs he has imposed to bring American trading partners to the table. But he suggested steeps tariffs he has placed on U.S. imports of Chinese products have yet to bend Beijing’s will. “Because they’ve been ripping us for so many years, it doesn’t happen that quickly,” Trump said. The Trump administration slapped tariffs on $200 billion worth of Chinese goods last month and is threatening to impose duties on virtually all of the goods China exports to the United States. Trump has said signs of economic weakness in China and its slumping stock markets are proof of the effect U.S. tariffs are having on the Chinese economy. Still, Beijing has remained defiant, vowing to stimulate domestic demand to cushion the blow from any trade shocks. “They’re having a much more difficult time now,” Trump said. “I don’t want them to have a difficult time.”
  • Canada to Eliminate Class 7 Barrier, Allow More U.S. Access to Dairy Market
    The U.S.-Mexico-Canada agreement that will succeed NAFTA includes the elimination of Canada’s Class 7 dairy price system and greater U.S. access to the Canadian dairy market than offered in the TPP free trade agreement, said senior administration officials late Sunday. President Trump pulled the U.S. out of the Trans-Pacific Partnership as soon as he took office in 2017 and demanded the renegotiation of NAFTA. The officials declined to say how large a share of the Canadian market would be open to U.S. dairy products. Canada has offered access to its tightly controlled dairy market as part of other recent trade agreements. According to the officials, the new trilateral pact, which will be called the U.S.-Mexico-Canada Agreement, or USMCA, includes provisions to prevent Canada’s supply management system from affecting the world market in dairy products. President Trump has repeatedly criticized Canada on social media for the Class 7 system, which applies to ultra-filtered milk, a high-protein product used in making cheese and yogurt. U.S. dairy groups said the Class 7 system was created to shut off its shipments of ultra-filtered milk to Canadian processors. The senior administration officials announced agreement on the USMCA an hour before the U.S.-imposed deadline for a deal. Leaders of the three countries will be able to sign the pact after a 60-day review period. Congress would vote on it next year. One of the administration officials described the agreement as “a great win for the president and a validation of his strategy for international trade.” U.S. farm groups said their first goal in negotiations for the new NAFTA was to maintain duty-free access for farm exports to Canada and Mexico, followed by such issues as Canada’s supply management system for dairy, poultry, and eggs. The two U.S. neighbors account for a combined one third of U.S. food and agriculture exports and imports. Both nations run an agricultural trade surplus with the U.S.

Summary:

The grain markets started and finished strong off of reaction to the new US trade agreement with Canada and Mexico that replaces the NAFTA. At the close Beans was up 9.75 cents, Corn was up 9.50 cents and Wheat tagged along gaining 1.75 cents. Both the US Dollar and Crude Oil futures rallied as well. Crude was particularly strong rising more than $2 to reach past the $75 per barrel level on the December contract.

China canceled a high-level security meeting with the U. S. scheduled for mid-October amidst trade disagreements, U. S. equipment sales to Taiwan and b-52 flyovers in the east China Sea and South China Sea.