Headlines:

  • S. Trade Envoy Says NAFTA Talks Moving Quickly
    U.S. trade envoy Robert Lighthizer said on Monday negotiations with Canada and Mexico on modernizing NAFTA were moving quickly, but it was too soon to know whether the sides will reach a conclusion before elections in Mexico and the U.S. “We’re moving at warp speed, but we don’t know whether we’re going to get to a conclusion,” Lighthizer told an audience at the Center for Strategic and International Studies ahead of the next round of talks in Ottawa on Sept 23-27. The sides have said they would like to conclude talks on revamping the North American Free Trade Agreement by early next year because of the Mexican vote and midterm Congressional elections in the U.S. in November 2018.
  • Hedge funds end ag selling spree – despite US corn, soy, cotton upgrades
    Hedge funds ended a bearish betting spree on ags dating back to July, despite higher-than-forecast crop supply estimates in a much-watched report – sparing themselves losses, indeed, to price resilience since. Managed money, a proxy for speculators, reduced its net short position in futures and options in the top 13 US-traded agricultural commodities, from corn to sugar, by 57,427 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows. The reduction in the net short – the extent to which short holdings, which profit when values fall, exceed long bets, which benefit when prices gain – was the first in seven weeks, ending a spree during which sales exceeded purchases by nearly 500,000 contracts. And the buying came despite the US Department of Agriculture on Tuesday, in its monthly WASDE report on world ag supply and demand, confounding market expectations by raising estimates for US corn and soybean yields, while also hiking hopes for the US cotton harvest to well above forecasts.

Summary:

As of the most recent reporting, the US Corn crop was 7% harvested, up 2% from last week but still well shy of the 5-year average pace of 11%. The Corn crop rating remained unchanged at 61% in the good to excellent category. The Soybean crop was listed at 4% harvested trailing the 5-year average pace of 5%. The Soybean crop rating improved 1% to 60% week over week.

All three markets settled lower. After having been on a run that was looking to buck the trend, Soybean also came under pressure after being in positive territory in early trading. It eventually surrendered all of its gains and finished ¾ cent lower. December Wheat was down 6.25 cents and December Corn rounded out the day’s losses with a drop of 3.25 cents. Private exporters reported export sales of 261,000 metric tons of Soybeans for delivery to China for the 2017-18 marketing year and 126,000 metric tons of Soybeans for delivery to unknown destinations for the 2017-18 marketing year.

News of delayed Soybean planting in Brazil because of heat and Argentina because of flooding seemed to have initially helped Beans find support but that dissipated by the end of the day. The US Dollar may be at a critical low if it can continue rising this week. December Crude also finds itself at an important resistance level where $51 has given it quite the challenge over the past few weeks.