Good Morning,

Futures at the CBOT are higher with corn up 5 cents, beans up 5 and wheat up a 4 cents as well. News early this morning of a new NAFTA agreement has also helped brighten the mood heading into the pivotal Saturday meeting at the G20 between President Trump and Chinese President Xi.
Things started out slightly lower overnight, but recovered as hopes grew that Trump and Xi will be able to iron out some of their differences over trade and come up with some sort of truce. Any truce will likely need concessions from China to end their tariffs on US soybeans and other goods. An agreement, even if it is rudimentary, might prevent current US tariffs on $200B of Chinese goods from rising from 15% to 25% and provide the time necessary to negotiate the details of much a broader framework.

Obviously there is another outcome from Saturday night’s dinner that is significantly less desirable. It would not take a very big stretch of the imagination to see the two leaders unable to come to an agreement and the trade war escalates with our current tariffs rising to 25% and the possibility of tariffs on another $270B of Chinese goods becoming a reality.

I would advise producers to be making some sales for summer and fall of 2019 at current levels. July $3.70 and Oct/Nov $3.65-3.70 levels are on the table and should be grabbed.

Have a Safe Weekend.

Garry Gard