China and US agree to a Ceasefire No New Tariffs for 90 Days
Dec 03, 2018
China, US Agree To A Ceasefire, No New Tariffs For 90 Days And China To Resume Agricultural Imports
Following Saturday’s G20 Summit in Argentina, officials from China and the US agreed to not impose any more tariffs and work towards a comprehensive trade deal over the next 90 days. Soybeans, as well as corn, traded sharply higher during the Sunday night session on the news. The specifics of the Trade War truce are that the US will keep all current tariffs in place but will not raise the $200 billion worth from 10% to 25% for 90 days and China will resume purchasing American farm products “immediately” but no timetable was given. The White House announced that US Trade Representative Robert Lighthizer will be heading up the China talks scheduled to take place during this 90-day period. The largest hurdles to overcome are forced tech transfer, intellectual property rights, non-tariff barriers, cyber crime, and ag goods.
Export Sales Announcement
Private exporters reported to the U.S. Department of Agriculture export sales of 147,500 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.
US, Mexico, And Canada All Signed Trade Pact, Congress Must Still Approve
On Friday, the leaders of the US, Mexico, and Canada all signed the new United States-Mexico-Canada Agreement (USMCA), effectively replacing NAFTA. The USMCA will preserve duty-free exports of grain between the three countries, welcome news as Mexico has purchased increasing amounts of US grain and Canada is the 5th largest export market for US dried distillers grains (DDGs). Congress, as well as legislators from Mexico and Canada, must also all approve the deal and agree to strike down NAFTA. In January, Democrats will take control of the House of Representatives, which may impede the deal’s implementation.
Commitment Of Traders Report Shows More Speculator Selling Through Nov 27
On the week ending on Nov 27, several days before the G20 Summit in Argentina, money managers had increased their net short position in soybeans by 6,124 to 59,303 contracts. This is the largest bearish position since Oct 30. For corn, managed money also increased their net shorts, nearly tripling them, by 21,202 to 31,054 contracts, the largest net short position since Oct 9. The report showed that speculators also increased their net short position in KC HRW wheat by 7,870 to 10,748 contracts and is the largest net short position since Jan 23. For Chicago SRW wheat, speculators slightly decreased their net short position by only 898 to 38,744 contracts.
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