-Soybean oil rallies on revival of biodiesel tax credit
-Brazil/China soybean meal export protocol near finalization
-Specifics of Phase One deal continue to be debated
-No USDA sales announcements
-Argentina seeing some rains
 Debate over the potential implications of the Phase One trade deal relative to ag products specifically is going to be a constant in the markets for the foreseeable future. While the U.S. has repeatedly made specific comments about “agreed upon†dollar figures of U.S. ag product exports to China over the next two years of $40-$50 billion, rhetoric from China continues to be much less definite. China’s vice chairman of the National Development and Reform Commission, Ning Jizhe, who has been front and center in the latest Phase One deal developments, said, “As long as the U.S. products and services are marketable and can meet the needs of Chinese people, expanding imports from the United States is something we would like to see.†Additionally, he said,†there is “no doubt that China will increase the procurement of high-quality and market-competitive U.S. agricultural products,†but specific amounts are still being determined, while also saying China, “will import some wheat, corn and rice from the United States,†but will continue to focus on self-sufficiency in grains which is already the case, being corn, wheat and rice. Timing of the expected signing of the deal continues to mostly center around the first week of January pending final legal reviews, translation proofreading, etc., but that “working-level discussions are still going on between China and the U.S.†As all of the talk continues to spur rampant optimism in the markets regarding potential massive U.S. ag exports to China in the coming years, it is wise to keep in mind that even China’s largest annual soybean imports ever in 2017/18 of 94.1 MMT from all sources, even if priced at $10.00/bushel, equates to roughly $34.5 billion in total value. At today’s January futures price of $9.23, that value drops to roughly $31.9 billion. From 2013-2017, U.S. market share of China’s total soybean imports averaged 38%. Even a quick look at the numbers makes $40-$50 billion in annual imports appear exceedingly difficult to achieve.
ï‚· Soybean oil is solidly higher this morning on reports the current tax bill debate includes riving the $1.00/gallon biodiesel tax credit retroactively back to January 2018 and extending it through 2022.
 Brazil’s soybean crushing association Abiove said government officials are in final stages of establishing export protocols with China allowing for exports of soybean meal. As Brazil looks to increase soybean crush in the coming years to meet domestic soybean oil demand from the planned biodiesel blend mandate increase to 15% from 11% currently, which is expected to increase crush by 9 MMT over the next three years, new export markets for soybean meal are being sought. Large-scale Brazilian soybean meal exports to China are not necessarily expected, but the opportunity, at least, appears likely to be there moving forward as was recently added for Argentine meal to China, as well.
 Brazil’s soybean crop is now 94% planted vs 91% the previous week and 96% average, while the 1st corn crop is 96% planted vs 99% last year and average. Argentine soybean planting is 64% complete vs 66% last year and 68% average, while corn planting is 64% planted vs 72% last year and 63% average.
ï‚· There were no USDA sales announcements this morning.
Weather Rains of .25-.75†fell in Buenos Aries and Entre Rios, with things mainly dry in the rest of the Argentine growing yesterday. Conditions are expected to be mainly dry across the Argentine growing regions through the first half of Thursday and then rains of .50-1†are still indicated to fall with coverage of around 85% by later Thursday into Friday. Dry conditions return for the 6-10 day period. In Brazil, rains of 1-2â€+ fell across most of Santa Catarina, Parana, Sao Paulo and MGDS yesterday, with totals elsewhere generally under .30†and spotty coverage. Widespread .50-1.5†amounts are expected in the next 5 days, with similar additional coverage/amounts expected in the 6-10 day period, as well.