Wheat Futures Lower Overnight; NAFTA Round Ends Without Agreement, With Optimism
(Agriculture.com) – WHEAT DROPS ON PROFIT-TAKING AFTER PRICES RUN TO MULTIMONTH HIGHS
Wheat prices dove overnight as speculative investors who were long the market, or bet on higher prices, booked profits after recent gains to multimonth highs.
Money managers and hedgers who’d had long positions likely sold their contracts after Chicago wheat reached the highest in three months and Chicago wheat touched a four-month high, analysts said.
Also weighing on prices are farmer sales as commodity trading advisers said growers should increase selling after the price increase.
Fundamentally, nothing’s changed in the past 24 hours. It’s still extremely dry in the Southern Plains where most of the winter wheat is grown in the U.S., which doesn’t bode well for crop prospects. The dollar also remains weak relative to its counterparts, which likely is spurring some demand for U.S. agricultural products.
Soybeans and corn were also lower in overnight trading.
Wheat for March delivery fell 6¢ to $4.51¼ a bushel in overnight trading on the Chicago Board of Trade. Kansas City futures lost 5½¢ to $4.64¼ a bushel.
Corn futures declined 1½¢ to $3.60 a bushel overnight.
Soybean futures for March delivery fell 7¢ to $9.93¼ a bushel. Soybean meal futures dropped $2.90 to $337.60 a short ton, while soy oil fell 0.07¢ to 33.01¢ a pound.
SIXTH ROUND OF NAFTA TALKS END WITHOUT AGREEMENT, BUT PROGRESS SEEN
The sixth round of negotiations to modernize the North American Free Trade Agreement concluded in Montreal earlier this week, and while it seems the three sides are no closer to an agreement than they were at the end of the last round, at least there’s hope.
U.S. Trade Representative (USTR) Robert Lighthizer said that while he rejected a Canadian proposal during the latest round, he’s seeking “breakthroughs” to move the talks along. That’s better than in November, when after the last round of talks he said he didn’t see much hope for a resolution.
“We believe that some progress was made,” Lighthizer said in his closing statement. “We closed one chapter, as (Mexico’s) Ildefonso [Guajardo] said, it was the chapter on corruption, which is a very important chapter, and we made some progress on a few others. More importantly, though, we finally began to discuss some of the core issues. So this round was a step forward, but we are progressing very slowly.”
That’s much more optimistic than after the last round, when the USTR said he was “concerned about the lack of headway” during the fifth round of negotiations in November. At the time, he said he’d seen “no evidence that Canada or Mexico are willing to seriously engage on provisions that will lead to a rebalanced agreement. Absent rebalancing, we will not reach a satisfactory result.”
While the negotiations have seemingly moved forward, they’re still moving too slow, he said. President Trump still believes NAFTA, at least in its current form, is unfair, Lighthizer said, which leads to more concern that the U.S. will, at some point, pull out of the agreement.
Agriculture groups have long expressed concerns that if the U.S. were to leave NAFTA, it would shut off important trade pipelines for corn, soybeans, and wheat.
The next round of talks is scheduled for February 26 to March 6 in Mexico City.
EXTREMELY DRY WEATHER, LOW RELATIVE HUMIDITY CONTINUE IN SOUTHERN PLAINS
It’s still dry in the Southern Plains, but the Oklahoma and Texas panhandles are no longer under red-flag warnings – at least for now.
Many parts of New Mexico, right next door, however, are seeing the warnings.
“Elevated fire weather conditions are expected today across the southern Texas Panhandle due to breezy west to northwest winds and continued dry conditions,” the National Weather Service said in a report early this morning.
In New Mexico, relative humidity is expected to fall as low as 8% and wind gusts are forecast to 45 mph, making for tinderbox-like conditions.
Open fires – or anything that could spark a fire –aren’t advised.
