Looking at the frustration of turning the corner on COVID & then a trade war starts picking up. White House puts out 16-page release in regards to China. Will we see counter measures? Is China to be blamed for what is happening globally as we see countries increase pressure on China & China in turn puts tariffs in place. Torpedo’s Taiwan & soybeans. Seasonally tendencies for corn. Heading into a holiday weekend…what tone could we see come Tuesday? Strong bean shipments out of Brazil.
According to three ethanol-industry sources and shipping data, a rare U.S. ethanol shipment will arrive in China very soon. Reuters says that may be the first ethanol shipment to hit China since the two countries struck a trade deal earlier this year.
China recently waived some additional tariffs on almost 700 American products, including ethanol, to support more purchases of U.S. farm goods to help meet its obligations in the Phase One trade deal. Since China made the move, the ethanol industry has been watching for signs of renewed trade in the biofuel. Tariffs on U.S. fuel ethanol were as high as 70 percent after Beijing upped some retaliatory tariffs on U.S. imports in the back-and-forth trade dispute with Washington, D.C.
A slump in fuel demand brought on by COVID-19 led to an oversupply of ethanol that caused prices to bottom out, forcing producers to slash their production amounts. One of the three sources to tell Reuters about the shipment says the vessel was carrying ethanol that originated in the United States and had been resold to China, likely from a seller in Saudi Arabia. A trader based in China tells Reuters that, “People are looking to import fuel ethanol from overseas as prices in northeastern China have risen in the past few days.”
President Trump spoke to the farmers today. How are his comments going to have an effect on the markets today & in the days to come? Is the world starting to turn against China & will it help to straighten things out? Politics involved muddies the waters. Is there some stabilization happening in the ethanol market? The President also suggested not taking beef from other countries. A quiet day in the cattle market. Boxed beef dropped again on the day. Hogs saw a downtrend for a Tuesday.
Analysts already expect China to be unable to meet its obligations under the Phase One trade deal it signed with the U.S. this year. Now, the relationship between the two largest economies in the world appears to be in trouble.
President Donald Trump seemed to add fuel to the fire when he told the Fox Business Network that he has no interest in speaking to Chinese President Xi Jinping right now. He even went as far as admitting the possibility of cutting ties with the Asian nation. Reuters says the U.S. president is very disappointed with China’s failure to contain the COVID-19 outbreak, noting that the pandemic cast a pall over his Phase One deal with China, which was previously hailed as a major achievement.
“They should never have let this happen,” Trump says. “So, I make a great trade deal and now I say this doesn’t feel the same to me. The ink was barely dry, and the plague came over. And it doesn’t feel the same to me.” Trump’s irritation extended to the Chinese president, who Trump one said he had a good relationship with. “Right now, I don’t want to speak to him,” Trump told Fox. “There are many things we could do. We could even cut off the whole relationship.”
Chinese buying soybeans. WASDE on Tuesday. Est for 2020 carryout is 3.3 billion could be a new record. Largest corn crop on record. What about the stocks to use ratio? How will ethanol & feed demand fair? What are the soybean numbers looking like? Lower stocks & carryout for wheat. On the flip side livestock took a hit on a Monday for the cattle. Hogs were lower, but not as drastic as the cattle market.
Another limit up day in the livestock…what does that mean for the near term? Relationship between grain & livestock producers in these current times. Will we see $500 Choice boxed beef? We go through these feelings every year with market movements, just this year its escalated feelings. We are socially isolated on a regular day in ag, but as it continues the feels are getting more stressed. China Phase One…where do we sit? WASDE report due out on Tuesday.
The U.S.-Mexico-Canada-Agreement enters effect July 1, according to U.S. Trade Representative Robert Lighthizer. The July 1 date represents a one-month delay from the original timeline, following the signing of the agreement by the U.S., Canada and Mexico.
In a statement last week, Lighthizer says the agreement supports more balanced, reciprocal trade, leading to freer markets, fairer trade, and robust economic growth in North America. The agreement contains significant improvements and modernized approaches to rules of origin, agricultural market access, intellectual property, digital trade, financial services, labor, and numerous other sectors.
Lighthizer says, “The crisis and recovery from the COVID-19 pandemic demonstrates that now, more than ever, the United States should strive to increase manufacturing capacity and investment in North America.” Lighthizer calls the start of USMCA a “landmark achievement in that effort.” The trade agreement ensures most agriculture tariffs will remain at zero, and expands dairy market access to Canada for the U.S., among other benefits.
Markets tank again on a Monday for the cattle market. Limit down on the live & feeder cattle. JBS closing two plants for two days, plants are slowing down & or going dark. Is the market worried about the shortened cattle kills? Heavy cattle concerns? Positives on the cattle side? Good weekend clearance. Demand for fast food hamburger is crazy. Smithfield closes plant in SD. From pork exports. St. Joe numbers-Brad checked with the USDA on the numbers…186.08 formulated cattle dressed steer 167.89 Was hoping for some life in the grains, some hopefully might be stability in the fuel market. One dry spot in South America