Headlines:
- Chinese ethanol imports to tumble by two-thirds, as production rises
Chinese fuel ethanol imports will plummet by nearly two-third in 2017, thanks to trade restrictions and rising domestic production, US officials said. The US Department of Agriculture’s Beijing bureau saw 2017 imports of bioethanol, ethanol produced from organic matter for use as road fuel, at just 300m liters, down from 853m liters a year earlier. The outlook follows a series of increases to Chinese duties on US imported ethanol, and an ongoing drive to increase domestic ethanol use.
- UK wheat exports slump, as the origin loses competitiveness
A recovering pound, and rising domestic prices, sent UK wheat exports crashing down in December, government data showed. UK December wheat exports came in at 93,425 tonnes, the lowest level seen in December since the 2013-14 season. This was down 45% from November, and down 63% year-on-year.
- Australian wheat futures nudge higher, despite crop estimate hike
Sydney wheat futures nudged higher, despite officials hiking their estimate of Australia’s newly-finished harvest to a record high – as they downgraded their sorghum crop forecast to the lowest in nearly 20 years. Eastern Australia wheat futures for March gained 0.5% to Aus$224.00 a tonne, matching their highest finish since September. The headway came despite Abares, Australia’s official commodities bureau, raising by 2.49m tonnes to 35.13m tonnes its estimate for the domestic wheat harvest – meaning the crop exceeded the previous record high of 29.91m tonnes, set in 2011-15, by even more than had been expected. “An already-huge crop got larger,” said Tobin Gorey at Commonwealth Bank of Australia.
Summary:
In response to the possibility of an import tariff on Mexican items, Armando Rios Piter, the leader of Mexican congressional committee on foreign relations, has been posturing with proposed plans to introduce a bill that would switch Mexican’s Corn purchases from the US to Argentina and Brazil. Most recent metrics show that Mexico is the number one buyer of US Corn and over the course of the fall 2016 through mid-February 2017 has been responsible for 25% of all US Corn sales. The next largest buyer is Japan and they were responsible for 16%. This proposed bill may have a bark that is louder than its bite. Despite South America’s estimate record harvest, over the years SA has not produced enough supply to satisfy Mexico demand. In essence, SA would turn around and increase their US imports in order to satisfy new found demand. A potential issue for Mexico would be discovering that the alternative sourcing turns out more expensive than what the tariff would cost.
The Grain and Soy complex did hit a bit of resistance today as was expected. Corn was not down very much only surrendering 1.25 cents followed by a small loss for Wheat at 2.25 cents. Soybean produced the biggest loss on the day with a drop of 8.75 cents. It does appear that producers a bit more aggressive in the marketing recently. Rumor has it that US farmers have been taking advantage of the recent rally in Soybean to the tune of selling upwards of half their expected harvest.
