Soybeans Higher, Wheat Lower Overnight; Oxford Says NAFTA Exit Hurts U.S. Growth
(Agriculture.com) – SOYBEANS HIGHER ON PRODUCTION REDUCTION, WHEAT FALLS ON ACREAGE ESTIMATE
Soybeans were higher in the first overnight trading session since the World Agricultural Supply and Demand Estimates (WASDE) Report was released while grains were mixed.
Soybeans rose after the USDA reduced its projection for output. The government pegged production at 4.392 billion bushels, down from 4.425 billion a month earlier.
Still, the USDA’s stockpiles estimate rose to 470 million bushels from 445 million as exports are projected lower month to month.
Wheat was lower in overnight trading after the government said growers seeded 32.6 million acres with winter varieties, well above forecasts for 31.3 million acres.
The USDA said hard red acreage would total 23.1 million acres, above estimates for 22.3 million, and soft red acres would total 5.98 million, topping forecasts for 5.56 million.
Soybean futures for March delivery rose 6½¢ to $9.67 a bushel overnight on the Chicago Board of Trade. Soybean meal futures gained $3.20 to $320.20 a short ton, while soy oil fell 0.08¢ to 33.05¢ a pound.
Wheat lost 3¼¢ to $4.17¼ a bushel overnight, while Kansas City futures fell 4¼¢ to $4.22 a bushel.
Corn for March delivery gained 1¼¢ to $3.47½ a bushel.
OXFORD ECONOMICS SAYS NAFTA EXIT HURTS ECONOMIC GROWTH, HAS MINOR EFFECT ON TRADE GAP
Oxford Economics, which provides economic forecasting and modeling, said in a report that an exit from the North American Free Trade Agreement would reduce U.S. economic growth next year.
An exit from NAFTA would curb U.S. GDP growth by 0.5 percentage points in 2019 while also reducing GDP growth in Mexico by 0.9% and Canada by 0.5%, the report said.
Despite the economic impact, withdrawing wouldn’t “significantly” reduce the U.S. trade deficit, Oxford said. The trade gap would remain at 3.2% of GDP in 2018 and 2019 vs. expanding to 3.3% of GDP in 2019, according to the report.
President Trump has hinted several times that if negotiations don’t go well he may leave the agreement, a significant concern for agricultural producers. Mexico is the biggest importer of U.S. corn.
Talks between the U.S., Canada, and Mexico haven’t been going well, U.S. Trade Representative Robert Lighthizer said after the last round. Negotiators will meet again this month in Canada to continue discussions on NAFTA.
A U.S. exit from the talks, however, is a very real possibility, Oxford said in its report.
“Negotiations are slow and difficult, and the recent passage of the Tax Cuts and Jobs Act may embolden the administration to take a more protectionist approach in 2018,” the group said.
LINE OF WINTER WEATHER FROM TEXAS TO MAINE MAKING TUESDAY TRAVEL DIFFICULT
A line of wintry weather is hitting a stretch of land from southern Texas all the way up to Maine’s Atlantic Coast today, according to the National Weather Service.
Winter storm warnings, hard freeze warnings, winter weather advisories, and wind advisories have been issued along the storm’s path.
In central Mississippi, up to 3 inches of snow are possible while ice makes roads – especially those on bridges – extremely slippery, the NWS said.
In southern Texas, a winter storm warning has been issued as up to ¼ inch of ice is expected to accumulate as temperatures fall below freezing. Along with the precipitation, northerly winds up to 30 mph will create dangerously cold wind chills, the agency said.
Farther north, as much as 4 inches of snow are expected to fall in parts of Ohio, Kentucky, and West Virginia. Visibility will be reduced, and a glaze of ice may make roads slick, according to the NWS.
