Talks are being held this week in Mexico as negotiations continue on the North American Free Trade Agreement. It is unclear if the program can change enough to satisfy the U.S. leaders and allow the agreement to continue. The farming community in the U.S. had been under the impression for some time that the impact of any changes or the removal from NAFTA would be for other industries, and had therefore been largely quiet (relatively) on the matter.
However, in recent weeks the farming community's voice has been heard, as this is a major voting base for the current U.S. president and much of the Republican party in power. U.S. Agriculture Secretary Sonny Perdue addressed the issue, stating that they are preparing for "Plan B" where the U.S. withdraws from NAFTA and billions of dollars of agricultural trade is put in question, but this is not what he hopes for.
Wheat markets ticked lower this week but stayed in the established trading range. Consultant group Informa pegged all 2018 wheat acres in the U.S. at 31.92 million acres. This is another decline from the 32.70 million acres in 2017, which was the lowest planted area total in more than 100 years. In the U.S., winter wheat planting is basically done, with the U.S. Department of Agriculture reporting 95 percent completion. Conditions are decent as winter dormancy approaches: 54 percent of the crop is rated good to excellent compared to 55 percent last week and 59 percent a year ago.
Durum prices have not changed from a week ago. Supplies are known, and the market remains quiet. Informa released their estimate for 2018 planted area for durum in the U.S. Expectations are for a modest increase in spring wheat plus durum wheat area to 13.7 million acres from 13.3 million acres in 2017.
Canola prices struggled a bit this week. The market has little new information to trade on, and technical resistance at $520 per metric ton is keeping upside limited. That being said, strong demand remains in place, and the expectation for increased usage in the U.S. due to rising biofuels standards in 2018 remains in place. A broader look at oil focused on the North American Oilseed Processors Association report. October crush of soybeans were near a record for any month, yet stocks of soybean oil is very low. Yield of oil per bushel was down as well. While soybean oil prices have been off over the last two weeks, major declines are not expected into early next year as rising mandates and biodiesel import restrictions support.
Peas and lentils
India remains in the headlines for pulses. Government moves to support local farmers have included increases in support prices and import restrictions and taxes. This week, the Cabinet Committee on Economic Affairs has removed all prohibition to exports of pulses. This means that any surplus domestic production can be sold on the global market, giving farmers a broader demand base as planted area continues to expand. Pulse market prices continue to see pressure from these moves in India.
In other news, the USDA's Commodity Credit Corporation in Kansas City purchased 2,720 metric tons of pulses for food aid from Canada.
There's not much news in the mustard seed market this week. Prices were off modestly with weakness at the spot market level.
The inverse of the mustard seed market, barley prices ticked upward this week. Prices have found a little support on increased demand.