Free Commentary

By: Dan Hueber –

It is a refreshing change of pace to begin a new week with a little positive news for the ag sector.  First, there is word that the U.S. and Mexico may be very close to wrapping up and delivering a new trade agreement between the nations.  Representatives from both sides of the table have stated that while there are a few unresolved issues they are hopeful these will be resolved in talks yet this week.  If correct, this will absolutely be good news indeed.  The second item was confirmation that over in China, they have now unloaded the second and third ship of U.S. soybeans over the past several days.  Realistically this should not be a shock.  As I have commented a number of times, to believe that China can get along without importing beans from the U.S. was not a realistic notion, but I guess witnessing that confirmed with the physical product being unloaded provided a nice spark of buying in beans.  If that can hold for the close today, we may have opened the door for additional strength in the days ahead.  That fact this coincided with managed money leaning fairly short in the bean market, 59,000 contracts, opens up potential for a little extra pop if these beans become ill at ease.

While the news has provided the soy markets with a little extra optimism this morning, it has done little for the grain trade, and in fact wheat and corn pretty well erasing late week gains.  I suspect at least a portion of this can be attributed to grain/soy spread unwinding not to mention short-term overbought conditions.

The Pro Farmer Crop tour has kicked off and we should be soon be hearing updates on a pretty regular basis this week.  Additional news concerning Mexico and or China, could come any or every day but outside of this, there would appear to be little showing up on docket for now. That is other than one major item; harvest is rapidly approaching, which one has to suspect will keep a lid on values for the time being.