Headlines:

  • With NAFTA Talks at Crucial Point, Ag Is on the Table
    The U.S. will put its agricultural trade proposals on the table with Canada as part of this week’s round of negotiations for the new NAFTA, according to Agriculture Secretary Sonny Perdue. It’s the fourth of seven scheduled rounds of talks, and with limited progress so far, some analysts say the US is trying to torpedo discussions with unacceptable demands of its North American neighbors. “Honestly, we’ve been somewhat disappointed in the first three rounds, but we think this is the way these things get going,” said Perdue, speaking to the Washington International Trade Association last week. Perdue said he expects serious discussion of agricultural issues in the new round, which opens on Wednesday, and said there is a “real opportunity” for inroads into Canada’s supply-management system that limits dairy imports. The U.S. also objects to Canadian government management of the poultry market and may seek concessions from Mexico to limit shipments that compete with Florida’s fruit and vegetable marketing. Dairy was excluded from NAFTA in 1994, and the Trudeau government has vowed repeatedly to defend Canada’s farmers and the supply-management system. President Trump objected personally last April that Canada was undercutting imports of ultra-filtered milk, used in making cheese, from U.S. dairy farmers in the upper Midwest and the Northeast.
  • Weather May Drop Brazil’s Grain Output
    Brazilian farmers will likely produce a smaller amount of corn and soy in the 2017/18 season due to less favorable weather than the prior crop year, food supply and statistics agency CONAB said on Tuesday. In its first forecast for the 2017/18 crop, CONAB estimated Brazilian grain production at between 224.1 million tonnes and 228.2 million tonnes, compared with 238.5 million tonnes in the prior cycle. The lower end of the range would represent a 6% drop in output. “The highly favorable climate conditions that contributed to a record grain output last season are unlikely to be repeated,” CONAB said in a statement. Soy and corn will account for about 89% of Brazil’s grains output.

Summary:

Corn, Wheat and Beans all remain flat ahead of Thursday’s release of the USDA WASDE Report. November Beans were unchanged at settlement and Corn and Wheat were off ½ cent and ¾ cent respectively. Today, private exporters reported 131k metric tons of Soybean slated for deliver to China for the 2017-18 marketing year to the USDA. The US Dollar was down big losing about 40 basis points meanwhile December Crude found some strength today rocketing up about $1.20 dollars.

We anticipate that the Grain and Oilseed markets will continue be choppy ahead of Thursday. USDA Corn export inspections came in at 524,168 metric tons failing to meet the expected range of 650-850k metric tons. Year to date inspections are currently at 3,525,774 metric tons. USDA Soybean export inspections came in at 1,484,650 metric tons crushing the trade expectations range of 790-950k metric tons. Wheat markets followed the soy complex higher in early trading but eventually found weakness midday in conjunction with the Soy complex giving up its gains. Poor US export demand and a steady Winter Wheat planting rate is making it tough for support in Wheat price against the backdrop of large global Wheat stocks.