Good Morning,

Despite heavy rains in the upper Midwest the last 24 hours, the markets are under pressure this morning. Futures are trading lower with beans leading the move down after rumors late Thursday of a trade agreement that sparked a rally higher proved false. In fact, the US-Chinese negotiations ended with the US delegation delivering their list of demands; while, China sat largely silent. Corn is currently down 2, soybeans down 12 and wheat down 13! As I stated in yesterday’s comments I expect traders to reduce their short positions heading into the weekend.
Yesterday the Trump administration said it wants China to reduce the trade deficit with the U. S. by $200 billion dollars by the end of 2020. This was part of a list of demands given to Chinese officials at the beginning of trade talks yesterday. China’s state media says that talks between the two countries ended in Beijing with an agreement on how to work through escalating trade disputes but said large differences remain on many matters.
The last 24 hours have demonstrated that trying to trade politics is nearly impossible and there is a lot of uncertainty as these trade wars loom. Producers should be actively marketing grain with these recent rallies and not focus on the weather in their back yard as indicators of where they think the market may or may not go.

Have a Safe Day!

Garry Gard