Markets are mixed with corn up 1, beans down 3 and wheat up 1 cent to start the day. Grain markets are trying to bounce back while beans are struggling a little due to the favorable weather outlook and new political turmoil with China.
China vowed retaliation after the U.S. forced the closure of its Houston consulate, prompting stocks to fall in one of the biggest blows to diplomatic ties between the two countries in decades.
The US government gave China 3 days to close its consulate in America’s fourth-most populous city in an “unprecedented escalation,” A Chinese Foreign Ministry spokesman told a regular briefing Wednesday in Beijing. China planned to “react with firm countermeasures” if the Trump administration didn’t “revoke this erroneous decision.”
The State Department subsequently confirmed in a statement that it had ordered the consulate closed “to protect American intellectual property and Americans’ private information.” It said international agreements required diplomats to respect the laws and regulations of the host nation and not interfere in its internal affairs.
There really is no idea what form the Chinese retaliation might take, but I would assume that this is a direct threat at the Phase 1 Trade Agreement. To this point no plans have been set forth for Phases 2 & 3. China could very easily pull back on their US Ag purchases due to the rising political tensions.
Weather in the US suggests we will produce a big corn crop. Growers with old crop are running out of time. Longer term, there is the potential for export demand developing with a weaker $USD. But that is a story for 2021 & beyond and not going to help old crop or the 2020 crop that is looking bigger every day.
Have a Safe Day!