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Commentary

The big news of the day and main driver in the grain market was provided by President Trump, as he put a lengthy post on Truth Social late morning. Trump sees no reason to meet with Chinese President Xi after actions taken by China in the past 24 hours.  China had increased restrictions on exports of rare earth minerals and magnets essential for the production of most electronics, including everything from cell phones to airplane engines to radar to today's advanced defense weapons. To counter Chinas actions, the President posted that “one of the policies that we are calculating at this moment is a massive increase of tariffs on Chinese products coming to the United States of America. There are many other countermeasures that are, likewise, under serious consideration." It appears that China's relationship with the United States could be falling to a new low in my opinion. Trump also stated that the United States has been contacted by other countries who are "extremely angry" at China's move, which caught them by surprise. Outside of the trade war drama, the other issue that markets are focusing on since the gov’t is still shutdown is the cash market. Basis levels have been a hot topic since before harvest began, as the industry pre prepared for a glut of corn and soybeans across the Midwest. While that isn’t unusual, China’s absence has spilled a more profound level of uncertainty across the marketplace. However, as harvest advances and futures hover around dismal levels, producers have largely opted to utilize on farm storage in my opinion, which has kept grain from hitting the market in earnest. Yields, demand, barge freight and interest rates are also factors in the equation. No trade recs as of this post. Too many variables into a three-day weekend that could create a gap opening Monday night in my opinion. 

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Sean Lusk

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