Top leaders from the U.S. and China are meeting in Washington trying to strike a deal that will end the 18-month trade war.
Initial reports suggested the two sides are finding some common ground, with the U.S. offering to reduce tariffs in exchange for China buying more U.S. agricultural products.
While this deal is expected to be limited and won’t fully resolve the conflict, the hope that China will return to being the biggest buyer of U.S. soybeans lifted prices substantially in the past week.
Soybeans had already been rising ahead of the meeting after a U.S. Department of Agriculture report projected a smaller harvest this year and more demand than previously anticipated, and news of Chinese buying shot prices to a 15-month high of $9.39 per bushel Friday.
If the deal is limited in scope, there could be other challenges to the markets again in the future, but farmers should welcome the good news.
Alongside the soybean rally, corn prices neared $4 per bushel, a welcome relief for farmers preparing to harvest their corn crop, as prices were near $3.50 just a few weeks ago.
Pound rallies royally
The British pound caught fire, leaping to a three-month high Friday after the European Union declared that Brexit negotiations were going well.
The British economy has been in limbo for months after its citizens voted to leave the EU. Despite the directive from voters, the British Parliament has continuously rejected the separation terms laid out by the EU.
Economists’ greatest fear was that Britain would crash out of the EU without a deal, creating turmoil on both sides of the English Channel. A messy divorce would be even more troublesome along the border between British-held Northern Ireland and the Republic of Ireland, an EU member state.
Instead, it looks more likely that a structured plan will be put in place, hopefully giving British citizens more certainty about trade deals and ability to travel to EU countries.
The news of a potential deal pushed the pound to its biggest rally in nearly a decade, rising nearly 5 cents (up 4%) in 24 hours, trading midday Friday near $1.27.