U.S. Mexico Canada trade deal closer with House passage

Just a day after a raucous and divisive impeachment vote, the U.S. House of Representatives overwhelmingly passed a bipartisan vote to approve the updated NAFTA deal. Dubbed the “USMCA,” the new trade agreement is being hailed as a win for U.S. autoworkers and farmers, boosting automotive wages and agricultural exports.

More importantly, the passage of the deal will remove a major threat to the U.S. economy. Mexico and Canada are our top two trading partners and the uncertainty around maintaining a trade union has weighed on numerous sectors of the U.S. economy.

The Senate still needs to ratify the treaty but is expected to do so early next year. One winner of note is U.S. dairy producers who will see an increase in exports to Canada, which could help shore up the troubled industry. Prices for milk futures rose on the deal’s passage in the House, with many contracts approaching contract highs.

Industrial commodities rise on China export hopes

Like soybeans, grains, and hogs which are especially sensitive to any hints the Chinese tariff war is resolving, many industrial commodities are benefitting from expectations that the U.S. vs. China tariff spar is simmering down.

Crude oil, lumber, and metals, especially copper, have been intermittently rising on hints and tweets that would help restore demand for construction and world economic conditions in general. Copper is often seen as a barometer of industrial strength leading to the adage that “Dr. Copper” has a PhD in economics and will predict the stock market’s direction.

Industrial metals stockpiles have been dwindling as countries like Chile and Indonesia have neglected to ramp up production due to global uncertainty. At the same time, demand for copper, silver, and petroleum have all increased as the world economy remains stable, helping to boost prices.

As of midday Friday, March copper traded for $2.81 per pound, March silver for $17.23 per ounce, and March crude oil for $60 per barrel.