USMCA. Higher grain numbers…did the Chinese numbers get faded out? WASDE report. Chinese production numbers corn & wheat were higher. Final USDA Crop Progress report for 2019. Dollar traded lower. Livestock…USDA cut in exports for beef & pork. Chinese hog heard is starting to rebuild. Cattle markets & weights.
USMCA Chatter. Spitting of weather across the Midwest. Soybeans sharply higher-funds are short. Trade deal talks of last week makes some worried that a deal with China might not be done. Extended crop reports…crop report out tomorrow-can we expect any surprises? Stats Canada Vomitoxin issues, test weight issues on corn. South America weather. Price action on the livestock shows we haven’t learned a lot on the trade issues.
Winter doldrums effecting the markets, trade war has no real incentives from China. Crop size & the USDA reports. Basis & its pressure on the elevators. South American Crop.
In a flurry of meeting with reporters Tuesday in London, President Donald Trump says he has no deadline for finalizing a complete trade deal with China.
China and the U.S. are still working to reach a phase one agreement, with an unofficial deadline of December 15, but an overall agreement may extend beyond the 2020 elections. Trump told reporters, “In some ways, I think it’s better to wait until after the election.”
Trump says China wants to reach an agreement, adding, “the China trade deal is dependent on one thing: Do I want to make it?” Trump claims he is doing “very well” in the talks with China. The President also pointed out the $28 billion in trade aid given to U.S. farmers, with “many billions” leftover, adding about the funds, “that got them whole.”
China wants Trump to remove tariffs in reaching a phase one agreement that also includes $40-$50 billion in purchases of U.S. agricultural products over two years.
Trade negotiations with China continue as the U.S. and China seek to wrap up a phase one agreement, promised two weeks ago. U.S. Commerce Secretary Wilbur Ross told Fox Business News, “the ball is in China’s court,” in an interview Monday. He says the talks are making progress, but described the negotiations as “one step forward, one step backward.”
If nothing happens before December 15, President Donald Trump plans to move forward with a round of tariffs on China, as Ross called the date a “logical deadline.” China wants the U.S. to roll back tariffs in making the agreement. Meanwhile, Ross again confirmed China promised $40-$50 billion of purchases of U.S. ag products as part of the agreement.
China was a near $20 billion market for U.S. agriculture before the trade war began. However, that market has dropped roughly 50 percent since the trade war began, as retaliatory tariffs by China focused on U.S. agricultural products.
Another solid week on the cash cattle. Could there be a correction headed our way? Any holiday pressure that might work into. How are cattle weights. Holcomb KS plant to start back up this week. How do you think the market react? Funds are long. Some red flags popping up. Hogs…way to cheap but China is playing a role in that. 10% of corn crop still in the field. Basis in corn market. China on again off again. December 15th…will we see changes before then? Mixed grain markets.
Both the U.S.-Mexico-Canada Agreement and a phase one agreement of a deal between the U.S. and China appear to be slowly edging forward.
The Hagstrom Report quotes House Speaker Nancy Pelosi as saying, “We are within range of a substantially improved agreement for America’s workers. Now, we need to see our progress in writing from the trade representative for a final review.” The Trump Administration says that U.S. Trade Representative Robert Lighthizer will provide a written agreement to Congress this week.
Trump is continuing to push House Democrats to bring the agreement up for a vote. “House Democrats have insisted that hard-working Americans need more from the USMCA than just the same broken NAFTA with better language but no real enforcement,” Pelosi says. “It still left American workers exposed to losing their jobs to Mexico.”
Meanwhile, President Trump says the phase one deal with China is “close.” At the same time, he also says the U.S. is monitoring the situation in Hong Kong. “We’re in the final throes of a very important deal,” Trump says. “It’s going very well, but at the same time we want to see things go well in Hong Kong.” Trump’s comments last week came just hours after a phone call between the Chinese Vice-Premier, USTR Robert Lighthizer, and Treasury Secretary Steven Mnuchin.
Markets closed early on Friday for the Thanksgiving holiday. This year’s crop outcome-what will be harvested is about there-this could move the markets higher as reality sets in that all the crop won’t be out before 2020. How will this change the basis? Cash will win in the end. South American production-any issues heading into December. December 15th deadline looming with China-will they just continue to buy what they need? Corn exports saw some improvements this past week. Getting a final spike trade in the dairy industry. Still seeing some Chinese purchases for milk powder. Weeks snowstorms and upcoming weekend weather be of concern to the feeder cattle market?
Wheat bulls, Chinese politics, and USDA formulas are all topics of discussion to start the week off on the Fontanelle Final Bell. Darrin Fessler, Lakefront Futures, looks at the wheat market at possible momentum and technical trading to the upside. Fessler notes that it’s unusual to see the Minneapolis wheat futures at a discount to Chicago wheat futures.
Following the weekend election results in Hong Kong Bejing may be feeling political pressure to get a Phase One Trade deal signed with the US.
Finally Fessler looks at how the USDA is currently formulating feed use in the US and if the latest cattle on feed report will have an impact on that formula.
How did the corn and soybean markets do for the week? Does the market care if a Trade deal is done with China?
a. Yes Initially.
b. Depends on the deal after the initial move.
Do you think a trade deal with China will get done in the next month? Did your opinion on the market change after the crop? What will the market be watching going forward?
a. South American Weather
c. Chinese Trade Talks
d. US Production
8. How does corn demand look?
How does soybean Demand look? Where do you think the market goes from here?