top of page

Latest on China Talks, South American Harvest and The U.S. Forecast

Update for January 31st, 2019

Chinese vice premier Lui is leading the delegation during the current round of trade talks in Washington with U.S. officials including U.S. Trade Representative Robert Lighthizer. It’s believed that President Trump is scheduled to join in the high level discussions today with Liu. As the two nations meet once again in an effort to resolve trade disputes here are a few of the important points for everyone to be aware of:

  • There are significant issues over China’s intellectual property and technology transfer practices.

  • President Trump tweeted earlier today that discussions were moving along well but no actual agreements are expected to be reached until he and President Xi Jinping meet in late February, just days before the March 2nd deadline.

  • The eyes of the global agricultural community will be anxiously awaiting any news regarding any agreements regarding agriculture as there have been no details given yet.

2018 U.S. soybean imports to China dropped to their lowest level since 2008. According to customs data, imports during the month of December dropped by 99% to just 69.298 metric tons which was an improvement over November when China imported no U.S. soybeans. Over the course of 2018 imports from the U.S. reached 16.6 MMT’s or about half of 2017’s 32.9 MMT total. Brazil reaped the benefits seeing a 126% increase during the month of December according to information gathered from China’s General Administration of Customs by Reuters.

There were a total of 62 various reports from NASS, FAS and ERS that went unpublished during the government shutdown and since offices were reopened the USDA has been busy rescheduling several of those reports. On Monday, USDA Chief Economist Dr. Robert Johansson told Ag Day that, “Our primary concern is getting out that information as quickly as possible, and since it has to be done under Lockup conditions for a log of that data we’re going to stick to our February 8 schedule. So it will likely be a more impactful February release than we normally would have.” The February Lockup will include release of the February World Agricultural Supply and Demand Estimate (WASDE), the January Crop Productions reports, the Annual Crop Production report, Grain stocks, Rice Stocks, Winter Wheat and Canola Seedings and Cotton Ginnings. A Lockup is used to guarantee that no information is released early to anyone. Even the Secretary of Agriculture is unaware of the reports contents until he enters the Lockup area to sign the report just prior to the release. In addition there are other reports that do not require a Lockup for analysis and some of those may be announced prior to February 8th. Reports that are scheduled beyond February 15th could be in jeopardy of delays if government officials are unable to reach a funding agreement before the deadline. If the government remains open the annual USDA’s Ag Outlook Conference will go on as scheduled on February 21st and 22nd.

AgRural reported last Friday that the soybean harvest in Brazil is running ahead of normal pace. At that point 13% of the soybeans have been harvested compared to 4% by this date a year ago and the 5 year average of 3%. Mato Grosso is reporting the fastest harvest pace where 29% of the soybean crop has been harvested followed by Parana at 18%, Goias 14% and Mato Grosso do Sul at 8%. AgRural reports that they expect to lower their soybean production estimate next week as their last estimate of 116.9 million tons was on January 9th. (Food for thought: 4 out of the past 12 years, U.S. soybeans have posted their highest price for the entire crop season during this time of year when the crop in Brazil was threatened. Not saying that this will be the case this year but it’s an interesting fact to consider.) Dr. Cordonnier is also reducing his soybean production estimate by 1.0 million tons to 114.0 million tons and is also lowering his corn crop estimate for Brazil by 0.5 million tons to 91.5 million tons due to the extremely dry weather this growing season. He is also reducing his Argentine soybean production estimate by 1.0 million tons to 55 million tons due to excessive rainfall but has left his corn estimate unchanged.

An essential highway in Brazil, BR-163, used largely for agricultural purposes is being improved. This roadway has been proven to be problematic for producers. Farmers in Brazil’s largest soybean producing state of Mato Grosso have had many issues reaching the ports in the northern part of Brazil due to poor travel conditions on this highway. The goal is to have the roadway paved by 2021. In addition a small stretch is being added to the highway that will connect it to the Miritituba River Port and that is expected to be completed by the end of this year. (Reuters)

Temperatures across the U.S. are beginning to recover after one of strongest Polar Vortex invasions in a generation. As the Polar Vortex exits, the region will welcome some above-normal temperatures for the weekend and the start of next week. The maps shown below from WeatherTrends 360 shows a milder air mass moving into the Eastern half of the U.S. while the Western U.S. takes their turn with dramatically colder temps. WeatherTrends warns us though that an additional, but less intense, Polar Vortex outbreak is likely to return to the Eastern U.S. by mid-February.

42 views0 comments

Recent Posts

See All
bottom of page