Grain News – Pessimism over the U.S. and China Trade Talks
A lack of consensus at an Asian-Pacific summit this weekend led to some pessimism over the U.S. and China trade talks, which spilled over to yesterday’s grain markets, hurting soybean prices with November contracts down more than 2% in the session. Corn and wheat futures also took a moderate hit to start this week.
December corn options will expire this Friday, Nov. 23, the day after Thanksgiving in a holiday shortened session.
President Trump has a threat on the table to add tariffs to another $250 plus million of goods coming from China if a trade deal is not reached by the time he has dinner with President Xi at the G-20 Summit at the end of next week. The two sides have been talking, but China has thus far failed to address a short but significant list of demands, according to comments coming from the White House. Feed buyers could afford, and have shown willingness to pay, the retaliatory tariffs, but are afraid to do so. That lack of buying is the most evident in the weekly U.S. soybean shipments to all destinations, as shown in the chart below. Shipments through the first 11 weeks of the marketing year total 405 million bushels, down 43% from the previous year and 178 million bushels below the seasonal pace needed to hit this year’s lower USDA target. Time is running out with the Brazilian harvest starting around the end of December.
China said they plan to build 254 “strong agricultural industrial towns” as they try to modernize their agriculture sector. They may also consider putting an end to a ban on GMO seeds.
- 19-Nov-2018 03:00:14 PM – US WINTER WHEAT – 56 PCT CONDITION GOOD/EXCELLENT VS 54 PCT WK AGO (53 PCT YR AGO) -USDA
- 19-Nov-2018 03:00:14 PM – US WINTER WHEAT – 93 PCT PLANTED VS 89 PCT WK AGO (97 PCT 5-YR AVG) -USDA
- 19-Nov-2018 03:00:14 PM – US WINTER WHEAT – 81 PCT EMERGED VS 77 PCT WK AGO (88 PCT 5-YR AVG) -USDA
- 19-Nov-2018 03:00:14 PM – US SOYBEANS – 91 PCT HARVESTED VS 88 PCT WK AGO (96 PCT 5-YR AVG) -USDA
- 19-Nov-2018 03:00:14 PM – US CORN – 90 PCT HARVESTED VS 84 PCT WK AGO (93 PCT 5-YR AVG) -USDA
Just a friendly reminder that those of you with December basis or HTA contracts will need to lock them in this week, it was a .10 cent spread to March. Please don’t hesitate to contact your Grain Marketing Specialist to assist you with these contracts. From all of us at Landmark grain have a safe and Happy Thanksgiving.