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Developing: China Could Make Biggest U.S. Corn Purchase In 7 Years
· China’s soybean demand has been hit by swine fever, raising doubts about Beijing’s trade promises
Why U.S. growers are betting the farm on soybeans amid China trade
· China big weekly buyer for soybeans, pork
Developing: China Could Make Biggest U.S. Corn Purchase In 7 Years
By Betsy Jibben, AgDay TV, National Reporter
via AgWeb - March 13, 2019 03:03 PM
AgDay and U.S. Farm Report have unconfirmed information that China may purchase more than 3 million metric tons of U.S. Corn from the Pacific Northwest. It’s a rumor which has analysts glued to their computers until the next daily export report is released.
“There’s no confirmation yet of these sales [as of Wednesday afternoon],” said Brian Basting, an Economist with Advance Trading. “If it is a large quantity, it must be reported again by the USDA in its daily reporting system.”
If realized, the country hasn’t purchased that much corn from the United States since the 2011/2012 marketing year.
“The last time we did more than 3 million tons was in 2011/2012 crop year,” said Basting. “You have to go back 7 years. That year China bought a little over 5 million metric tons [for the whole entire year].”
Before that, China purchased more than 3 million metric tons back in the 1994/1995 marketing year.
“Right now, the export market looks quite weak,” said Basting. “That was probably a driving force behind this move to new lows. This would be a big deal if we can get if you will a ‘shot in the arm’ with some old crop business to China here in the near future.”
According to USDA’s latest World Agricultural Supply and Demand Estimates...
more, including video report [0:14 min.]
China’s soybean demand has been hit by swine fever, raising doubts about Beijing’s trade promises
An outbreak of African swine fever has hit China’s pig farming sector, driving hog numbers down and pushing the demand for soybean feed lower amid large global stockpiles.
China committed to buy an additional 10 million metric tons of U.S. soybeans, U.S. Agriculture Secretary Sonny Perdue said on Twitter in late February.
However, falling import numbers and the outbreak of African swine fever in China have fueled concerns that the world’s second largest economy may not be able to live up to its pledges to buy more.
Huileng Tan, CNBC
Mar 12 2019
As the U.S. and China continue to negotiate a trade deal aimed at satisfying both sides, soybeans are emerging as a bargaining chip for Beijing to use as leverage in those talks.
But while Beijing has pledged to buy more American soybeans, analysts question if China — the world’s largest consumer of the oilseed — has the appetite for it.
In addition to tariffs brought on by the ongoing trade dispute, falling import numbers and an outbreak of African swine fever in China have added to concerns that the world’s second largest economy may not be able to live up to its pledges to buy more.
According to U.S. Agriculture Secretary Sonny Perdue, China has committed to buying an additional 10 million metric tons of U.S. soybeans. Beijing has also reportedly offered to purchase more than $30 billion in American agricultural produce a year as part of a trade deal.
However, customs data show that soybean imports have been falling in recent months.
Last year, China’s soybean imports from the U.S. hit its lowest in a decade. More recently, customs data showed that soybean imports in February fell to their lowest monthly level in four years — or 17 percent lower than a year ago, in part due to heavy tariffs on American soybeans.
“The trade conflict will certainly be playing an important role because China will no doubt have imported significantly fewer soybeans from the U.S.,” Commerzbank analysts wrote in a note on Friday.
“U.S. export figures had already raised doubts about whether China would buy the promised 10 million tons of soybeans in the U.S. These doubts have not been reduced by (February’s export) data from China,” the bank’s analysts added.
African swine fever outbreak ...
Trade uncertainty ...
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Why U.S. growers are betting the farm on soybeans amid China trade war
Mark Weinraub, Reuters
March 13, 2019
CHICAGO (Reuters) - U.S. farmers are gearing up to plant what could be their third-largest soybean crop ever despite failing to sell a mountain of beans from their last harvest due to a U.S.-China trade war that remains unresolved.
Soybeans were the single most valuable U.S. agricultural export crop and until the trade war, China bought $12 billion-worth a year from American farmers.
But Chinese tariffs have almost halted the trade, taking the biggest buyer out of the market and leaving farmers with crops they cannot sell. The U.S. government estimates farmers will have 900 million bushels, or approximately $8 billion, of last year’s soybeans in storage silos around the country when they start harvesting the next crop.
The U.S. government rolled out a $12 billion farm aid package last year to soften the impact of falling revenue on farmers, an important source of votes for U.S. President Donald Trump.
As winter ends and farmers begin planting, they will continue to plant soy despite uncertainty over whether they will be able to sell beans to China later this year. There are simply no better options, farmers say.
“It is tough to rotate out of soybeans because what else are you going to plant?” said Darin Anderson, a 41-year-old farmer from Valley City, North Dakota.
One alternative, sorghum, was also dragged into the trade war. Farmers also could increase their corn acreage but the corn-based ethanol industry is struggling. Additionally, farmers who plant corn on the same fields two years in a row need to buy extra fertilizer and fuel.
Alternative niche crops such as hemp are expensive to start growing and have limited markets.
“Farmers have made long-term investments whether it is equipment or storage,” said Josh Gackle, a 44-year-old farmer from Kulm, North Dakota.
“All that is very specialized and the transition to something else takes a new set of investments.”
That means farmers will plant soybeans in the hope that the trade war ends, or that they will be compensated by another bailout or crop insurance schemes.
The U.S. Department of Agriculture (USDA) forecasts farmers will sow 85 million acres of the oilseed this spring. That is down just 4.6 percent from last year and would be the third largest U.S. area planted with soybeans.
The USDA expects soybean prices will fall...
China big weekly buyer for soybeans, pork
By John Perkins, Brownfield
March 14, 2019
China showed up in a couple of significant spots in the USDA’s weekly export sales report. During the week ending March 7, China bought more than 1.7 million tons of U.S. soybeans and 23,800 tons of U.S. pork, making it the top weekly buyer for both commodities. No date has been announced for the resumption of face to face trade talks between the U.S. and China.
Combined old and new crop export sales for beans, corn, soybean products, and wheat were within most pre-report expectations. The 2018/19 marketing year runs through the end of May for wheat, the end of August for beans, corn, and sorghum, and the end of September for soybean products...
Net pork sales totaled 50,300 tons. The reported buyers were China (23,800 tons), Mexico (8,900 tons), Japan (4,500 tons), Canada (2,900 tons), and Colombia (2,100 tons), with a cancellation by Nicaragua (200 tons).
Net beef sales totaled 12,800 tons. The listed purchasers were Japan (6,500 tons), South Korea (1,700 tons), Taiwan (1,500 tons), Hong Kong (1,100 tons), and Canada (1,000 tons).