Headlines:
U.S. Pork, Fruit Producers Brace for Second Wave of Chinese Tariffs
U.S. producers of pork, already saddled with duties enacted in an earlier round of the escalating trade dispute with China, are bracing for further pain after Beijing hit the products with additional tariffs due to come into effect next month. China implemented a 25% duty on most U.S. pork items on April 2, and a 15% tariff on a range of fruits and nuts, in response to U.S. tariffs on Chinese steel and aluminum products. Last week it included both categories in a second round of tariffs to be imposed on July 6. No other products have been listed twice. Pork now faces cumulative import duties of 71%, not including value-added tax, according to a formula published on the website of China’s finance ministry last week. Cumulative duties on fruit amount to 50%.
US wheat export sales data show obvious improvement – corn, soy, cotton less so
Is US wheat beginning to emerge from the export doghouse? After some not-too-bad (by recent standards) US wheat export sales data for the first week of June, which was also the first week of the 2018-19 wheat marketing year in the US, the second week has shown even better statistics. The US sold 461,600 metric tons of the grain for export in the week to last Thursday, a rise of 53% from the previous week, and a figure towards the top end of market expectations of 250,000-500,000 metric tons. It was also the strongest figure on a current-year basis since before Christmas, and driven by strong sales to the Philippines, of 137,000 metric tons, Japan and Thailand. If there is a disappointment for investors in the main winter wheat futures markets, it was that it was actually other types of the grain which led the charge. Spring wheat, as traded in Minneapolis, accounted for 178,663 metric tons, its best performance on a current crop-year basis in more than six months. And white wheat, not listed on futures market, accounted for a further 150,858 metric tons, also a six-month top. For (Kansas City-traded) hard red winter wheat, the total was a more modest 107,915 metric tons, and for (Chicago-traded) soft red winter wheat 25,381 metric tons.
Summary:
Corn and Wheat futures finished higher on the day while Soybean futures suffered a 10-cent loss on the day. The US Dollar index was stronger overnight trading up past 95 points. India has now retaliated to the US tariffs of steel and aluminum with a variety of higher import taxes. These items range from apples to chickpeas, as well as increased duties on iron and steel products. Corn finished the day up 3.25 cents on the heels of export sales of 165,900 tons for the 2017-18 marketing year which was well below trade estimate that ranged from 700k – 1 million metric tons (mmt). It posted 339.7k mt for 2018-19 versus trade estimates of 150k to 400k metric tons. Soybean traded weaker overnight and continued through the regular session on concerns over a global trade war. Soybean export sales came in at 301.8k metric tons for 2017-18 versus trade estimates of 300k to 600k metric tons. It also posted 227.6k for 2018-19 versus trade estimates of 100k to 400k metric tons. Cycle strength continues to be in play for Wheat futures. Wheat export sales posted at 461.6k metric tons for 2018-19 versus trade estimates that ranged from 250k to 500k metric tons.
