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-Ag markets rally on ideas of Chinese trade proposal
-Discussion of tomorrow Export Sales numbers
-USDA early acreage ideas from Outlook conference
-Brazilian soybean export ideas lowered
-No USDA sales announcements
 
 Ag markets rallied overnight following a Bloomberg article stating China is proposing to buy an “additional†$30 billion a year of U.S. ag products including soybeans, corn and wheat to be included in a potential trade agreement. The Chinese offer of higher ag purchases was termed to be part of a memorandum of understanding and are said to be on top of pre-trade war purchase levels. A removal of anti-dumping and anti-subsidy tariffs on U.S. DDGS is also said to be part of negotiations, as well. In 2017, China imported a total of $24.2 billion of U.S. ag products, which would imply the potential for a massive $54 billion in purchases. The devil will be in the details and time will tell, but for now the market reacted rather positively to the news.
ï‚· The USDA issued preliminary new crop acreage and average farm price ideas at this morning opening session of the Ag Outlook forum. Corn acres were estimated at 92.0 million vs 89.1 mil last year, soybeans 85.0 mil vs 89.2 mil last year and all wheat 47.0 mil vs 47.8 mil last year. More details can be found at https://portal.rjobrien.com/MarketInsights/Blog/Read/35020. Their full balance sheet ideas will be released tomorrow morning.
 Tomorrow morning’s Export Sales report will reflect 6-week total combined sales data for each commodity for the weeks ended 01/10/19 through 02/14/19 rather than individual weekly data as is typically reported. Accordingly, comparing to past years’ sales will be more difficult. To try to put tomorrow’s numbers in context, we looked at sales for the same 6-week period over the last five years. For corn, the average total combined 6-week sales over the last five years was 7.161 MMT (5.23-10.44 MMT range), but last year’s massive sales of 10.44 MMT (Brazilian crop problem) skewed the average higher. Excluding last year, the average of the other 4 years was 6.34 MMT. The 6-week average total sales for soybeans over the last five years were 3.30 MMT (2.31-3.75 MMT range), wheat 2.34 MMT average (1.51-3.15 MMT range), SBM average 1.34 MMT (1.03-1.56 MMT range) and SBO average 120k tonnes (75-161k range). Use these numbers for comparison when tomorrow’s data is released.
 Brazilian ag consultant, Agroconsult, lowered their estimate of Brazil’s new crop soybean exports to 70.2 MMT from 73.0 MMT previously and, while in line with the last USDA estimate of 70.0 MMT, would be down sharply from last year’s 84.2 MMT as a resumption of U.S. soybean exports to China is anticipated, negatively impacting Brazilian exports in the year ahead. They left their estimate of Brazil’s soybean crop essentially unchanged at 116.4 MMT (116.5 MMT previously) and compares to USDA last at 117.0 MMT and CONAB at 115.3 MMT (exports 71.5 MMT). Agrocosult sees Brazil’s safrinha corn crop at 68.9 MMT (68.6 MMT previously), solidly above CONAB’s last estimate of 65.2 MMT and last year’s 54.0 MMT. They see the total corn crop at 95.6 MMT vs CONAB at 91.7 MMT and USDA at 94.5 MMT. Brazilian corn exports are estimated by Agroconsult at 32.0 MMT vs CONAB’s 31.0 MMT, USDA 29.0 MMT and last year’s 24.8 MMT.
 Brazil’s Parana state soybean production is estimated at 16.4 MMT by Deral, the state ag agency, vs 16.9 MMT previously estimated and CONAB’s 17.3 MMT and last year’s 19.2 MMT. Deral sees the state’s safrinha corn crop at 12.8 MMT vs CONAB’s 12.1 MMT and last year’s 9.0 MMT.
ï‚· USDA will release the Oilseeds Crushings report and Grain Crushings report with January data tomorrow afternoon. Cattle on Feed will also be out tomorrow afternoon, as well.
ï‚· South Korean feedmills bought 135k tonnes of optional-origin corn at $202.23-$203.99/tonne c&f for July arrival and appears likely to be Argentine. In other business, Taiwan tendered for 110k tonnes of U.S. wheat for April-May shipment with offers due by Feb 26.
ï‚· Egypt ended up buying 360k tonnes of wheat as a result of their latest tender, with 180k French and 60k tonnes each of Romanian, Ukrainian and Russian wheat.
ï‚· There were no USDA sales announcements this morning.
 
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