Last week’s trade agreements, including signing of Phase 1 with China and the USCMA (NAFTA 2.0) are positive news in the Ag front. So why are markets lower? China has agreed to purchase substantial amounts of Ag products, but purchases are based on market conditions. No significant crop issues in South America and a cheap Brazilian real (10 year lows to USDA) will likely impact market conditions. The US dollar while trading in low 96s at year-end have rebounded to mid 97s.
Another new developing fear is that China’s new mystery virus will impact global economics. Impeachment trial for Trump in Senate is also taking the stage.
US soybean exports are 9.7% below USDA estimates and 20.9% lower than the 5-year average and are 25% better than last year. US corn exports trail USDA estimates by 16% and are 38.1% below the 5-year average and are 50% below last year.
Weekly weather events here in the US have most areas in ample to excess moisture. After a brief cold spell, forecasts are for temperatures to return to above normal later this week.
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