Headlines:
Trump Will Try Again to Cut USDA, Says Perdue
The Agriculture Department faces large spending cuts, said Agriculture Secretary Sonny Perdue on Monday while a White House official said President Trump will ask for “one of the largest spending reductions in history” in the upcoming fiscal 2020 budget. Perdue told reporters that he encouraged the administration to submit a package “within the realm of negotiation,” considering Congress rejected outright Trump’s previous budgets. Perdue also said U.S. officials “will not be bought off” from seeking fundamental reforms in China’s trade practices, despite Beijing’s offer to buy large amounts of U.S. ag exports. Last week, Perdue said China committed to buy 10 million tonnes of U.S. soybeans during a meeting with Trump. “That’s near term, the 2018 crop we have in the bin now,” he said. “The impression I have is it’s imminent.”
U.S. Asked China for Lower Ethanol Tariffs, Says Perdue
Agriculture Secretary Sonny Perdue said on Tuesday that U.S. trade negotiators have asked China to reduce tariffs on U.S. ethanol, but it was not immediately clear whether Beijing was willing to oblige. “They are engaged in conversation, they listen and hear us, but we are at this stage unable to determine the willingness factor,” he told reporters on the sidelines of an event in Washington. Beijing last summer imposed retaliatory tariffs of up to 70 percent on U.S. ethanol shipments, made exports to the key market uneconomical. “We would certainly love below 15 percent,” he said, referring to the tariff level. He did not say what the exact level U.S. negotiators were seeking. Washington and Beijing have been locked in intense negotiations to end a trade war between the world’s two largest economies that has cost both countries billions of dollars and roiled global financial markets. Perdue on Monday said that a number of agricultural issues were on the table in trade talks, including poultry access, issues over beef exports, feed grains, ethanol and an animal feed known as distillers grains.
Summary:
The grain markets have been besieged by a selling mentality that was initially led by Wheat futures. Corn lost 4.50 cents on the day, Soybean surrendered the gains from yesterday and Wheat continued in its recent downward spiral. The continued weakness in the wheat market where several contracts fell to new contract lows on Monday appears to be pressuring corn prices as well. The possibility of the corn market and wheat market finding a bottom during the first delivery days on the March contract is possible. That is a key seasonal time that I watch for a possible change of trend and low in the corn and wheat markets. The more likely date is closer to the Spring solstice. Today, private exporters reported to the U.S. Department of Agriculture export sales of 120,000 metric tons of soybeans for delivery to Mexico. Of the total, 48,000 metric tons is for delivery during the 2018/2019 marketing year, and 72,000 metric tons is for delivery during the 2019/2020 marketing year.
