MarketsFarm — U.S. President Donald Trump’s impeachment hearings have dominated headlines and stalled progress in numerous trade developments, leaving the Chicago Board of Trade (CBOT) starved of meaningful news.
The Canada-U.S.-Mexico Agreement (CUSMA) has yet to be ratified by the U.S. House of Representatives. The trade pact, meant to replace the North American Free Trade Agreement (NAFTA), has lingered in Congress since 2018.
“There was talk this morning about the trade deal between the U.S., Canada, and Mexico, but it’s just sitting on the desk of Congress,” said Scott Capinegro of Barrington Commodity Brokers at Barrington, Illinois.
“It’s all laid out, it just needs the vote. It’s very frustrating.”
A trade deal between the U.S. and China may also die on the vine if the pact’s “Phase One” isn’t signed soon. Trump said Tuesday that if a deal wasn’t signed by Dec. 15, additional tariffs would be levied on Chinese imports.
“Trade has become just politics, instead of actual fundamentals,” Capinegro said. However, seasonal trends may provide some direction to markets.
“Basis contracts are priced in this timeframe until the end of the month,” he said. “So traders might be doing a bit more hedging against basis contracts right now.”
Also, about 20 million acres of corn remain unharvested in the U.S., which is very rare for so late in the harvest season.
“A lot of corn will sit all winter,” Capinegro predicted.
— Marlo Glass reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.