On Thursday, President Trump announced that he was cancelling the upcoming summit with North Korean leader Kim Jong Un.
This withdrawal was a response to North Korean complaints and threats, which President Trump met with a strong and measured response, “You talk about your nuclear capabilities, but ours are so massive and powerful that I pray to God they will never have to be used.”
Global markets reacted swiftly to the news, largely reflecting increased uncertainty and greater concerns about the prospect of nuclear war. Stock markets sold off worldwide, with the Dow Jones dropping by over 300 points during the day Thursday.
Meanwhile, money rushed into the U.S. dollar, government bonds, and gold, all of which are seen as “safe haven” investments in times of trouble.
On Friday morning, North Korea signaled an ongoing willingness to meet, a sign that this situation will likely remain murky for the foreseeable future.
Wheat’s getting baked
Wheat spiked Thursday to the highest level seen in nearly a year as the drought centered in Oklahoma continued to worsen, while dry conditions in Canada, Russia, and Australia added to concerns about world supplies. Kansas and Oklahoma winter wheat crop condition ratings are among the worst in history.
On the demand side of the equation, exports remained strong this week with Algeria and Japan buying U.S. wheat while Agriculture Secretary Sonny Perdue announced that a U.S delegation will head to China next week.
The Chinese trip is raising optimism for the potential of increased agricultural exports to that country, which has been a massive buyer of our crops. China purchased nearly $14 billion of U.S. soybeans last year (over one third of U.S production) and continues to be a main importer of hogs and cotton.
Though wheat is not a major export to China, the rising tide of corn and bean prices tends to pull wheat upward as well.
As of Friday morning, July Chicago wheat, used in desserts and crackers, was trading at $5.36 per bushel while Kansas City wheat, used in breads and rolls, brought $5.56 per bushel.