Check our advice monitor at ProFarmer.com for our marketing plan.
Grain markets ended the week on a largely positive note, shaking off earlier disappointment after the long-awaited summit meeting between President Donald Trump and Chinese leader Xi Jinping proved heavy on pomp but lacking in any major trade announcements. Helping to improve the mood were comments by U.S. Trade Representative Jamieson Greer, who told CNBC Friday morning that the U.S. and China had indeed reached agreements covering a subset of goods the two countries will be able to trade on more favorable terms.
- “We’ve actually reached agreement with the Chinese on a number of these things,” Greer said, referring to goods that include U.S. agricultural products and medical devices and Chinese consumer goods considered non-sensitive.
The Trump administration plans to release “a lot more details” on Monday regarding what negotiators for the two countries have accomplished in recent weeks, he said.
Producers, farm groups and grain market bulls have been looking for more clarity around Beijing’s commitments to buy U.S. agricultural goods as well as progress toward knocking down a 10% Chinese tariff on U.S. soybean imports.
Trump and Xi are set to see more of each other before the year is out. Trump said he plans to attend the Asia-Pacific Economic Cooperation summit in southern China in November, while Xi plans to attend the G20 Leaders’ Summit in Miami in December.
Weekly market recap: Grain futures kicked off the week on a positive note as optimism built ahead of the Trump-Xi summit meeting. Soybean meal remained a standout performer, buoying soybeans as western Corn Belt processors scrambled for supply amid wet weather and harvest delays. Wheat came under pressure on renewed hopes for Russia-Ukraine peace efforts while wetter weather in the Plains was seen kickstarting plantings. Harvest pressure began to weigh on corn.
Cattle futures saw weekly gains, but felt pressure at midweek with ICE raids slowing slaughter rates (see item below) in the Plains. Hog futures saw modest short covering after hitting 15-month lows as traders prepared to react to USDA’s latest Hogs & Pigs Report.
- December corn rose ¾ cent to close at $5.28 ¼, turning positive after hitting a four-week low and securing a weekly gain of ¾ cent.
- November soybeans rose 1 ½ cents to end at $13.19, up 15 ½ cents on the week.
- December meal fell $1.40 to $371, trimming its weekly gain to $12.40.
- December bean oil rose 29 points to end at 67.84 cents, down 38 points for the week.
- December soft red winter wheat declined 3 ¾ cents to end at $7.03 ¼ after hitting a five-week low and losing 11 cents on the week.
- December cotton closed 60 points lower at 82.71 cents, gaining 156 points for the week.
- October live cattle fell 20 cents to end at $218.875, up $2.95 on the week. November feeders gained $3.90 to close at $331.975, for a weekly gain of $13.975.
- October lean hogs fell 97.5 cents to $78.225, trimming a weekly gain to 12 ½ cents after bulls failed to gain traction on Thursday’s modestly bullish quarterly Hogs & Pigs Report.
Mulling diesel options: News reports said behind-the-scenes deliberation over whether to impose a ban on diesel exports in an effort to bring down fuel costs as harvest gets under way in the Midwest and heating season approaches in the Northeast continue. Politico reported Friday that administration officials are now weighing alternatives to a ban, including passing the issue down to the state level. The report said President Trump is expected to announce a policy decision later Friday or early next week. The evolving set of options include measures to boost distribution of “dyed diesel,” the red-colored fuel used in agriculture, construction and other off-road vehicles that’s exempt from state and federal taxes, the Politico report said, with the White House also seen potentially encouraging states to eliminate excise taxes on diesel ahead of the midterms.
- The report noted that Republican governors in Nebraska and other states have announced emergency plans to waive current taxes for off-road diesel while implementing other exemptions. Also, Republican Alabama Gov. Kay Ivey directed state law enforcement officials to halt enforcement of dyed-diesel rules for 120 days.
ICE raids slaughter plants: Raids by Immigration and Customs Enforcement in southwest Kansas and elsewhere were blamed for packing plant harvest interruptions that appeared to slow slaughter rates. In a joint statement, the Kansas Livestock Association, Oklahoma Cattlemen’s Association and Texas Cattle Feeders Association said they were closely monitoring ICE activity affecting agricultural communities in those states. The groups said they respect the responsibility of federal agencies to enforce the law, but warned that sudden workforce disruptions can have far-reaching effects that extend beyond individual businesses.
- “These ICE operations are having a massive chilling effect on the legal, documented, skilled workers that put beef on the table and keep the cattle supply chain moving,” they wrote. “Additionally, these types of disruptions will lead to higher beef prices for consumers.”
In this week’s Pro Farmer newsletter: Hillari Mason on how surging diesel prices hit the farmers’ bottom line twice; Spencer Langford on why a popular feedlot strategy has likely run out of road; plus news, analysis and advice. Click here.