The US, Mexico, and Canada announced on Sunday their new trade agreement. It is being billed as the new and improved NAFTA, and will now be called USMCA (US-Mexico-Canada Agreement). The ag markets have been trading higher since the announcement. We have been waiting for a trade deal and it will be good for hogs and corn. The market also like the fact we have one deal done and now we can move on to Japan, India, the EU and China.
We are also seeing money flow into the ag markets. Macro funds see corn and soybeans as relatively inexpensive compared to years past. With equity markets near all time highs, some macro money funds are taking profits in their equity positions and buying commodities. Corn and soybeans could use the long money flow!
Exports have been good for corn and soybeans but a little disappointing for wheat. The WASDE next week may show new crop ending stocks around 1.9 to 2.0 billion and new crop soybeans in the high 800s or maybe even 900mm. That is not bullish and will keep a cap on any rallies in the near term.
While the podcast does not have specific actionable trading recommendations, we do publish them in Turner’s Take Market Alert for spec traders and Turner’s Take Ag Marketing for hedgers. Want to know what to look for in the commodity futures markets? Take a listen to Turner’s Take podcast!
Craig Turner – Commodity Futures Broker
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