Soybean prices are leading grain prices higher this morning as the complex looks optimistically towards this weekend’s events at the G20 Summit in Argentina.
“You must welcome change as the rule but not as your ruler.”
– Denis Waitley (American Motivational Speaker)
Soybean Prices Are Optimistic About Argentina
Soybean prices are leading grain prices higher this morning as the complex look optimistically towards this weekend’s events at the G20 Summit in Buenos Aires, Argentina. Also impacting grain prices today is the fact that it’s the end of the month, so market positioning might also push markets around.
The January contract for soybean prices is a dime away from $9 USD / bushel in Chicago while the March 2019 contract is sitting above this new psychologically-significant level. If we think even further out, soybean prices on the November 2019 contract are sitting near $9.35. Since there are still a lot of unknowns, grain prices are still trying to factor in what 2019 acreage might look like, and thus, a lot of question marks remain for the state of 2019 U.S. soybean acres. 
G20’s Impact on Soybean Prices
While U.S. President Trump canceled his meeting with Russian President Vladimir Putin because Russia was still holding some Ukrainian ships prisoner, the meeting with Chinese President Xi is very much still on.
The theory that holds right is that the economies for both the U.S. and China are looking for something to give them a feel-good story going into the holidays and so some sort of positive announcement is likely being priced in.
Of course, what the details are behind this announcement are, are still unknown. However, rumors have been swirling that there will be some sort of announcement that will kick the can down the road.  Specifically, the buzz is that the U.S. will agree to not impose any new tariffs on Chinese goods and vice versa, in addition to the U.S. having a say in the Chinese long-term economic policy planning.
Finally, the new NAFTA, also known as the USMCA, is expected to be signed by the U.S., Mexico, and Canada today down in Buenos Aires. There are some question marks though that Mexico may stall the process as the outgoing Mexican President may back out in order to get the steel and aluminum tariffs removed. 
Updates on Grain Exports
Grain markets are seemingly more concerned about the trade war than they are about actual trade flows. Only U.S. corn markets are really thriving so far in the 2018/19 crop year with 13.6 MMT shipped out, up 81.5% year-over-year!
Rounding it out, here’s a breakdown of U.S. grain exports through yesterday’s USDA report:
- Total Wheat: 9.6 MMT through Week 25, down 15% year-over-year;
- Durum: 243,665 MT, up 21.5% year-over-year;
- Hard red spring wheat: 2.92 MMT, down 1% year-over-year; and
- Soybeans: 11.92 MMT, down 43% compared to the same time in 2017.
For Canadian grain exports, most crops are seeing a bigger number than a year ago as a robust 2018/19 exports campaign continues.
- Barley: 750,000 MT, up 26% year-over-year;
- Canola: 3.36 MMT, down 1.4% year-over-year;
- Durum: 1.01 MMT, down 22.5% year-over-year;
- Flax: 85,400 MT, up 1% year-over-year;
- Lentils: 142,300 MT, up 55% year-over-year;
- Non-Durum Wheat: 6.02 MMT, up 18.4% year-over-year;
- Oats: 598,500 MT, up 4.2% year-over-year;
- Peas: 693,000 MT, down 22% year-over-year.
If there’s one takeaway here, it’s that Canadian cereal exports are performing very well, notably barley which has two weeks of back-to-back crop year highs of weekly exports.
Again, most eyes – especially those concerned about soybean prices – will be on the G20 Summit in Argentina over the weekend. Regardless if anything is announced between the U.S. and China, expect some more volatility next week, especially on Sunday night when the markets open back up.