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#Grain #Futures Comments

by | Apr 17, 2019


 

-US/China trade negotiations concerning meat imports hold a few complications
-China Q1 growth a bit better than expected
-No USDA sales announcements
-Active US weather pattern to continue
 

It’s a rather quiet news morning with the grain markets attempting to find some stability after the recent acceleration to the downside. KC and MPLS wheat bounced modestly from yesterday’s contract lows, while July corn is sitting just 3.5 cents above its contract low and July soybeans are 4.75 cents off its lowest level since late November. The U.S. weather outlook isn’t a worst-case scenario, but it certainly is far from desired as regular rain events, with breaks in between, remain the overall forecast for the coming 14-day period. 

ï‚· US trade negotiators have said U.S. meat products have been a regular discussion point regarding a potential trade deal with China and that a notable increase in U.S. pork and chicken exports to China is likely to come as a result. However, there are some concerns as Chinese officials appear to be holding strongly onto their current ban of the growth hormone ractopamine, which is used in roughly half of U.S. hog operations. Additionally, China still has a ban in place on U.S. poultry imports that was established in 2015 due to the avian influenza outbreak at the time, but that is likely an easier issue to fix to allow a resumption of exports than is the ractopamine issue. 
ï‚· The Chinese economy posted a 6.4% year-over-year growth rate in the Jan-Mar 2019 quarter, which was unchanged from the Q42018 growth, and the lowest quarterly expansion since 2009. However, the steady growth rate in Q1 was seen as an optimistic sign that the recent economic slowing may be bottoming out and was better than consensus ideas of +6.3%.
 There were no USDA sales announcements this morning.  Ukraine’s corn crop is 6% planted
ï‚· Philippines tendered for up to 220k tonnes of optional-origin feed wheat for June-Sept shipment periods.
ï‚· Taiwan bought 65k tonnes of optional Brazil/US origin corn for June-July shipment at +107.79 cents CU9, equating to $190.46/tonne c&f. June-July shipment out of Brazil would reflect a rather early period for safrinha corn exports.
ï‚· Malaysia will leave the crude palm oil export duty as zero in May, as it has been since last September, with the calculated palm oil reference price of 1981 ringgit/tonne remaining below the 2250 ringgit threshold triggering a duty. 
 
  

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