Wheat higher on low crop rating. Soybeans rebounds from yesterday's losses. Argentina expecting precipitation
Wetter weather pattern expected to develop in crop regions. Rainfall is expected to continue over the weekend and into next week bringing 1.5” to 3” of rain to much of the crop-growing regions. Precipitation could provide some benefit to late planted double crop soybeans, but is disrupting drydown and harvest for much of the corn and soybean crops. If rains materialize it could provide some stability to production estimates which have been trending lower since the beginning of the growing season.
Crop Progress and Conditions
KC Wheat is trading higher this morning after winter wheat conditions were lower than expected. The seasons first crop progress and conditions report showed that 32 percent of the winter wheat crop was rated good to excellent compared to 51 percent good to excellent last year. Winter wheat conditions are at their lowest beginning ratings since 2002. Dryness remains across central and southwestern parts of HRW wheat area with little relief in the forecast.
China Tariffs on U.S Ethanol
China announced on Sunday it will add an additional 15 percent tariff on ethanol imports from the U.S. Analysts say this will keep Chinese buyers from buying U.S ethanol in the near term but that the country will eventually need to source additional ethanol to meet their gasoline blending target of 10 percent ethanol by 2020. Chinese tariffs on U.S ethanol have been at 30% since January 2017 which slowed imports to a trickle.
China Ready for Proportionate Response
Additional tariffs are expected to be announced by the U.S. on $50-$60 billion in Chinese imports. The tariffs are following an investigation under Section 301 of the 1974 U.S. Trade Act. China’s ambassador to the U.S said that the country is prepared to respond to any additional U.S. tariffs with counter-measures of the “same proportion.”
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