Here's a look at futures prices on commodities that impact Southern Illinois and the rest of the Midwest.
Farmers get a boost
U.S. farmers were relieved this week to hear that the U.S. Congress passed a long-awaited, wide-ranging $867 billion farm bill that will expand farm subsidies, support farmers’ markets, and even legalize the growing of industrial hemp.
Even better, trade talks with China appear to be improving, which boosted markets to multi-month highs. The Chinese are expected to make substantial purchases of U.S. soybeans as previously promised, and China announced it was going to begin lowering its retaliatory tariffs on U.S. automobiles.
While the trade war is far from settled, these first overtures have markets excited: December corn neared a four-month high of $3.79 per bushel this week, while January soybeans spiked to $9.28 per bushel.
Longer term, global supplies of corn, wheat, and soybeans remain ample, which could limit prices. Despite this week’s optimism, the longer-term supply and demand forces seemed to weigh on the markets, with soybeans finishing the week near its lows.
Worse yet, since China may be buying U.S. agricultural products again, the U.S. Department of Agriculture has announced that it will delay making a second round of subsidy payments for farmers affected by the trade war. While prices have rebounded, many farmers already sold much of this fall’s harvest at depressed prices, which could leave them hurting for cash.
Brexit path looks difficult
Britain continues to struggle with the impact of its 2016 vote to leave the European Union. As a March 2019 deadline for Brexit approaches, the British are increasingly concerned that they don’t have a plan.
British Prime Minister Theresa May has negotiated an exit path with the EU, but the plan has been widely rejected by British politicians, who are split between wanting a better deal or to stay within the EU. This led members of May’s Conservative Party to call for a vote to oust her, which she survived this week, leaving her in control of a sinking ship.
Caught between a choice of a bad plan or no plan at all, many Britons are calling for another referendum, which could result in a nullification of the original vote and a return to the EU and status quo. Amidst all of this uncertainly, the British pound is sinking to new lows, trading under $1.25, the lowest price in 20 months.