Headlines:

  • China to Boost Grain Imports From ‘Belt & Road’ Countries Amid Sino-U.S. Trade Spat
    China aims to step up grain imports from countries linked by President Xi Jinping’s project to create a modern-day Silk Road, seeking to diversify supply sources amid a trade war with the United States, a key cabinet researcher said on Wednesday. With demand rising, countries included in Xi’s ambitious ‘Belt and Road Initiative’ have strong potential to export “land-intensive agricultural products”, said Ye Xingqing, director of the Rural Economics department at the Development Research Center, a think-tank under China’s State Council. The Belt and Road plan, unveiled in 2013, aims at connecting China by land and sea to Southeast Asia, Central Asia, the Middle East, Europe and Africa. China has pledged $126 billion for the plan, largely in infrastructure investment. “It will be highly possible that these countries will win orders from China for land-intensive agricultural products,” Ye said, referring to grain that requires a large land area for growth in a speech at an industry conference in Guangzhou. The comments come months into a trade war between Beijing and Washington that has significantly altered global flows in trade of soybeans and other farm commodities. Imports of soybeans from the U.S. have come to a near standstill after Beijing imposed tariffs of 25 percent on the oilseed on July 6. Other American grains like corn and sorghum have also been affected.
  • S. farmers scramble to contain trade-war damage, find new markets
    Clouds crowded the Illinois sky as Nick Harre walked away from his combine at the peak of harvest to join four fellow farmers in greeting some unlikely visitors. Inside a nearby seed barn, they made their pitch to eight Sri Lankan government officials: Please buy our soybeans. The wooing of such a tiny market underscores the depth of U.S. farmers’ problems after losing their biggest customer, China, to a global trade war. Sri Lanka bought about 3,000 metric tons of U.S. soybeans last year. China bought about 32 million tons – but now buys almost none after Beijing slapped a 25 percent tariff on U.S. imports in July. The move came in retaliation for U.S. duties on Chinese goods imposed by U.S. President Donald Trump.

 

Summary:

Crude oil bounced back from making a 12-month low yesterday in what looks like a “dead cat bounce”. Corn and Soybean futures followed suit making small gains on the day.The President went on to day that China’s President Xi was critical in what looks to be decisions regarding the trade war ahead of the G20 meeting in Argentina. Corn prices moved higher with the crop progress lagging estimates. Average estimates were calling for an 11% increase from the previous week but fell short with only an 8% gain. The USDA reported that exporters sold 212,000 metric tons of US corn to Mexico for the 2018-19 marketing year. The soybean market traded higher because of an increase in flash sales. The crop progress report was also somewhat bullish and helped keep prices afloat. The US sold 148,000 metric tons of soybeans to an unknow destination for the 2018-19 marketing year. The wheat market traded sideways after the better than expected winter wheat crop condition and lower than expected USDA export inspections. Excess snow and rain this season has pushed winter wheat planting further behind, marking this the second slowest planting season in the past 10 years. Despite the poor weather conditions, winter wheat ratings rose 3% from the previous week.