Grain markets are mostly mixed this morning as the complex tries to finish the week in the green (which has been seemingly rare lately).
“Perpetual optimism is a force multiplier.” — Colin Powell (US Stateman)
Grain Markets Try to End Week in Green
Grain markets are mostly mixed this morning as the complex tries to finish the week in the green. After three days in the green, corn prices and soybean prices are pulling back a bit this morning. Conversely, wheat prices ended yesterday lower, but have rebounded this morning. Canola prices have been tracking the movements of the soy complex for the most part, but drier conditions in Western Canada have been one of the main reasons for price support. 
Weather isn’t something that’s been talked a lot about in grain markets lately. Yesterday, our Garrett Baldwin took a step back from his regular Grain Markets Today column and looked at what could be the one bullish factor left to propel corn prices and soybean prices and others.
Grain Markets Now Ignoring Trade War Talk?
While the media has mainly focused on US President Donald Trump’s activities in Europe and what’s more, Helsinki after the conversations with Russian President, Vladimir Putin, the trade war is still a go.
What we can all agree on right now is that China and the US will feel the negative impacts of a trade war.  US Ag Secretary Sonny Perdue continues to align with the White House, saying this week, “It’s really up to China.”  That being said, Perdue also acknowledges that $1 out of every $7 in US farm exports is at risk, and has some (yet-to-be-shared) plans on some subsidies or aid for farmers affected (AKA all farmers).
With less demand likely for US soybeans, it’s hard not to expect South American soybean acres to pick up for their Plant 2018 campaign, which starts in a few months. Further, it might be fair to expect US corn acres to increase again for the Plant 2019 campaign. Intuitively, this means that fertilizer demand in American might increase again. 
Now that the gameplan for China has started to get executed on, the next focus is likely North America. There are tariffs that Canada and Mexico have both put on the US already, mainly as retaliation to the steel tariffs implemented back in June. That being said, President Trump has suggested that a bilateral trade deal may happen with Mexico before it does with Canada. 
This comes after the quite-nationalistic Lopez Obrador was recently elected Mexican President. We’ve noted for many of our GrainCents readers that Lopez (also known as “AMLO” amongst the Mexican constituents) isn’t a big fan of the US.
Worth noting the fact that USDA export data shows that Mexico has been buying more US soybeans, as has Egypt and Pakistan. It’s hard not to want to buy when there are bargain prices on the table (relative to just two months ago, soybean prices are a bargain!) More than 1 million tonnes of 2018/19 American beans have been bought thus far That’s almost triple what was bought by this time a year ago!
GrainCents Content Coming Up
In this Sunday’s GrainCents Weekly Digest for the 12 crops we cover, we’ll be digging deeper into the trade war issues. Further, next week, we’ll be looking into potential implications of a revised NAFTA trade deal and if there will be any tariffs implemented by either Mexico, the US, or Canada for trade within the North American continent.
This week, for our GrainCents readers, we took a deeper look at what the 2018/19 Australian wheat crop is shaping up to look like, as well as how barley production is faring in the Land Down Undaa.
Conversely, there are some interesting developments in Europe, specifically in Spain and Ukraine. For the latter, it looks like there could be smaller production in both barley and wheat crops, according to the USDA attaché there.
In Spain, some rains this past spring have helped crops recover significantly after last year’s drought. Rapeseed, oats, barley, durum, and soft winter wheat production all appear to be higher year-over-year.
While a small sample size, this look at global production is what’s critical to making total sense of grain markets. That’s exactly what we do for our GrainCents readers as just looking at your front window, and the coffee shop talk is no longer the best practice for a solid grain marketing plan. Join us here today to start your free 3-week trial!