Headlines:

  • Trump Tariff Payments Top $6.4 Billion as Deadline Nears
    The USDA has received nearly 805,000 applications and paid out $6.41 billion so far in the Trump tariff payments created to buffer the impact of the Sino-U.S. trade war, said the USDA on Monday. The Trump payments are the largest element of a mitigation package that was announced as a maximum of $12 billion but could turn out smaller in the end. Already, the payments are a bolster for U.S. farm income. They were the primary reason the USDA modestly raised its forecast of 2018 net farm income (a measure of wealth that includes revenue as well as commodities held in storage) last November. Direct federal payments to farmers and ranchers, at $13.6 billion, would be their largest since 2006, before the commodity boom sent wheat, corn, and soybean prices soaring and reduced the need for the farm safety net.
  • Soybeans Lower Tuesday as Sales Miss Expectations
    Soybeans declined in early trading Tuesday as sales to China missed expectations. The USDA said on Monday that exporters sold 612,000 metric tons of soybeans to China. That’s down almost 39% from the 1 million metric tons reportedly sold after trade talks last week. Traders, producers, and analsyts are all waiting to see if China will buy more soybeans from the U.S. Last week’s two-day talks that included high-level delegates including Vice Premier Liu He and Trade Representative Robert Lighthizer reportedly went well, but White House Economic Adviser Kevin Hassett said on CNBC yesterday that there was a lot of work to be done. President Donald Trump has said he would meet with Chinese President Xi Jinping later this month in a bid to hammer out an agreement before the March 1 deadline. If a deal isn’t reached by then, the White House has said it will raise its tariff rate on more than $200 billion worth of Chinese imports to 25% from their current level of 10%. China would, no doubt, retaliate with trade barriers of its own.

Summary:

The USDA will release the Feb Supply & Demand report this Friday along with the delayed January reports, including the Dec quarterly stocks report, and winter wheat planting intentions, and final corn/bean production yield estimates. Markets were very quiet in overnight trade and largely throughout the day. This evening, the President will give his State of the Union address. Export inspections for last week totaled 35.4 mil bushels which was slightly lower than the pace from last week. Corn futures have traded with little volatility to start the week. Little is expected as far as a catalyst for directional drive until Friday’s reports. Soybean export inspections for last week totaled 35.8 mil bushels which his included 6 cargoes loaded for mainland China. However, cumulative bean export loadings are down 38% from last year at this time. A 612k ton China bean sale was announced yesterday morning, and the market expects additional sales announced the next few days. Wheat export inspections for last week totaled 16.1 mil bushels for all wheat loadings. Current year to date wheat loadings total 544.6 mil bushels compared to last year at 611.5 mil.