Citizens Weekly Newsletter January 18, 2019

Published 10 months ago



This Week in Agriculture

A Mixed Bag of Information from the Week that Was: January 18, 2019


· With the government shutdown looking to continue on indefinitely traders are adjusting to life with minimal information flowing, focusing more on cash grain values, freight movement, export inspections and the rumor mill to generate direction.


· Export inspections this week came in above the high side of expectations, and much higher than levels seen throughout the holidays, but below levels needed to meet current USDA estimates. CIF (export bids) values have shown some strength this week for corn and wheat likely indicating buying interest increased, especially with the recent move lower in futures. Soybean values have remained relatively steady, though traders are aware bids have returned to the Pacific Northwest after most buyers had nothing posted throughout harvest.


· Chinese import information for the month of December was released early this week as well, and was quite disappointing with soybean imports coming in at the lowest level seen in 7 years. With imports down 40% from the year prior traders are concerned that both the trade war and lower demand in the country with reduced protein percentages in feed rations and lower hog numbers due to disease could have lingering effects on business even after the trade war is resolved.


· China’s ag ministry confirmed 2 more cases of ASF was discovered in the country over the weekend, with one case at another large operation. Neighboring countries have insisted China not hide any information regarding to spread of the disease, and after some prompting the ag ministry also confirmed that 916,000 pigs have been culled due to the disease. Rumor has it many of the country’s breeding stock has been liquidated in an attempt to maintain solid supplies and help limit any sharp move to the high side price-wise domestically.


· French officials announced this week that all wild boars within 20 miles of the border with Belgium with be culled in an attempt to stop the disease from entering the country. Russia and Ukraine continue to struggle with the disease, while Chinese officials are working tirelessly to create a vaccine.


· Speaking of rumors, after a weak start to the week and a test of support levels in the recent range, we saw buying interest return on a slew of rumors when it comes to what is taking place with China. The first has China coming in to buy some hard red wheat and possibly corn. With cash values on the export side firming to indicate some buying interest has returned in both corn and wheat, and rumblings that China is chewing through their domestic corn stocks at a record pace via ethanol production, this rumor is pretty likely to be centered in fact.


· The second was a bit more interesting as a major newspaper reported Treasury Secretary Mnuchin claims the US will roll back all of the import tariffs it has place on China thus far in an expression of goodwill. The outside markets caught a nice bid on the conversation, but shortly thereafter trade representative Lighthizer said no such thing was taking place, and that it had not even been brought up to the President.


· There was also talk of a framework deal being put in place for a 50 billion dollar ag purchasing package between China and the US. This would be huge as at this point the claims of large purchases have been just that, claims, with little actual follow through so far. A promise like this in writing could be a game changer for US/Chinese relations going forward and would also be beneficial for US farmers as well with a guaranteed chunk of demand.


· At this point any such confirmation on export deals will likely wait until the government reopens, which at this rate—according to those involved with negotiations—could be months or years.

· Outside of China talk and other domestic usage developments traders will continue to watch weather in South America. The Argentine government announced that soy acreage there will be slightly below expectations due to flooding rains seen throughout much of their spring. Portions of Brazil have seen beneficial rainfall, while other areas of the country are still battling dryness. Extended forecasts there maintain a hot and dry outlook, which could have some major impacts on second crop corn acreage without a break in the pattern. 

Agribusiness
Angie Setzer Charlotte, MI
10 months ago
https://agfuse.com/article/citizens-weekly-newsletter-january-18-2019

Categories: Agribusiness

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Angie Setzer
Angie Setzer

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