Grain Notes 3/20/19 PM Comments
 

Corn futures were unchanged and bean prices were steady to 1 cent lower.  It was a quiet day with little news to drive the market one way or the other.  Late in the session headlines are suggesting the US/China trade talks are in the late stages of a settlement being reached.  While President Trump and President Xi are not planning to meet until June, other US trade representatives will be going to China to continue in person trade negotiations next week.  This to be followed by Chinese negotiators to come to the US the following week.  Secretary of Agriculture Sonny Perdue is quoted as saying that much of the Ag portion of the talks have been worked out but other items, including enforcement of a trade deal, are still being discussed. While trade talks are promising, they had no impact on prices today. 

• Soybean basis levels are 10-15 cents per bushel cheaper than US values. This is before any tariff costs are included.  Concerns over total world soybean demand has caused Brazil to lower their estimated export projections.  Most of the demand cuts are due to the impact of the African Swine Fever on China's pork production.
• China announced it is conducting a third round of pork purchases to continue a rebuild of their pork reserves.  They are re-building the reserve with disease free pork while consumer demand has fallen.  Processed pork products have tested positive for African Swine Fever, which doesn't affect humans, but consumers are seeking alternatives to pork. It is projected Chinese demand for poultry will increase 8% over last year due to the drop off in pork demand.
• President Trump and Brazil's President Bolsonaro have been in trade discussions between the two countries. The President's met in the White House today to discuss strengthening relationships between the two countries.  Positive trade impacts included 750,000 metric tons of US wheat to be allowed into Brazil tariff free. In addition, details are being worked out that would allow US pork to be exported to Brazil, and Brazilian beef to be imported into the US.
• Private analysts in Brazil are consolidating the country's bean production estimate around 116 million metric tons.  
• Ukraine’s corn crop for 2018-19 is estimated at 35.5 million metric tons. Their Ag Ministry looks for a sizable increase in area planted to corn for 2019-20. A private analyst in Ukraine raised their projected corn export estimate to 27.5 million metric tons, which was up from 26 million tonnes.  More competition for US corn exports.