The Hueber Report

It would seem that as we prepare to wrap up this week, the lone bullish holdout in the grain/soy complex is the bean market.  This is not difficult to rationalize as the corn and wheat bulls appear to have run out of fresh ammunition for now while over on the bean front, they can still dip into the Argentine production bin and uncovered a fresh supply with the recent resurgence in export demand.  If we were to close the week right now, nearby beans would be 30-cents higher and 80-cents up from the extreme lows posted last week. Corn would be down a ½-cent and wheat, while still a couple of cents positive, is sitting right on the lows of the week and threatening to fill gaps that were left last Monday.  I suspect that the strength in the bean market will soon exhaust as well.

I have read a few stories overnight that would be regarded as a step in the right direction for the ag sector and that President Trump may be trying to make good on the promise that American farmers would be provided with support in light of the ongoing trade spat with China.  First, the President stated that the administration “may” allow the sale of E 15 for a 12-month trial period. If successful, the could ultimately open the door for moving beyond the 15-billion-gallon cap on blending.  Second, after a meeting with farm state lawmakers yesterday, it was reported that the President has ordered his top economic advisors to revisit the Trans-Pacific Partnership (TPP) trade pact to examine if the US should consider rejoining.  In many respects, one of the most effective ways of countering China’s trade practices around the globe would be to commit to agreements with other trading partners, particularly in the fast-growing Pacific region.  Japan and ten other countries, including Canada and Mexico, have already signed onto the pact.

Finally, the hog market, which has probably been hit as hard as any market to tariff and trade pact issues received a shot of good news.  After having blocked the import of U.S. pork for the past 26-years, Argentina will once again open its gates. This will potentially open a market for around $10 million per year in sales to that nation.  Granted, this not a huge increase in relation to the $6.5 billion of pork that we export each year, but it is certainly a step in the right direction and welcome news for an industry that has been beaten down mercilessly over the past three months.