One countries loss is another's gain

Published on: 11:18AM Nov 15, 2019

It is good to be back home after a whirlwind trip to Brazil this week to speak at the Summit Agribusiness 2019 in Sao Paulo.  While the visit did not include a trip into farm country, I did have an opportunity to network with a number of individuals, including the Secretary of Agriculture for the State of Sao Paulo, who were either in farming or directly related to production agriculture in that nation.  While the topics and discussions were varied, there is one message that I came away from the meeting with; The ag industry of that nation fully recognizes they have been gifted with an opportunity via the U.S./Chinese trade war, not to mention a few other trade spats we have been or remain in,  to solidify and expand their trade relationships around the globe.  It would appear that as a nation, they understand the critical importance of their agricultural potential to their overall economy and are keen to expand that footprint in the years ahead.  No doubt, any of us, if presented with a similar situation, would be attempting to do the same thing. 

While we continue to hear conflicting stories at to the progress of U.S./Chinese trade negotiations, I have lost track if things are looking good or bad at this point, but there was one of the first in a while verifiable positive stories released yesterday.  China announced the lifting of a ban on U.S poultry and eggs that has been in effect since 2015. A U.S. trade representative estimated this could lead to as much as $1 billion in additional business with China, which would, of course, help us move closer to the reported $40 to 50 billion per ???, that has been tossed about in trade talks.   This should not come as a complete surprise as we know China is doing all it can to secure animal proteins this year and has been approving imports; it seems from about every meat exporting nation conceivable.  Take note that through the first eight months of this year, Brazilian export of meat to China has shown an increase of 48% in pork, 17% in beef, and 37% in chicken and over the past couple weeks, additional slaughterhouses have been approved for export. In this morning’s export sales report, overall sales of pork were down 78% from the 4-week average, but we did still sell 5,500 MT to China for this year and 9,900 for 2020.  

Wet weather has been hampering field activity in other parts of the world.  In France, corn harvest only advanced 6% and stood at 85% complete compared with 93% on average.  Winter wheat planting increased 5%, reaching 72% complete and winter barley sown increased just 2% and stands at 83% complete.  In India, late rains are delaying harvest progress there as well. 

While their export year is only 1/3rd complete, Ukraine grain exports have been robust thus far.  Total exports are up 42% from the previous year standing at 22.1 MMT, led by wheat exports of 12.6 MMT, up from 8.4 last year.  Barley exports stood at 3.4 MMT and corn 5.8 MMT.  

That is the perfect segue into our weekly export sales, which have been released this morning.  First up, for the week ending November 7th, we sold 238,600 MT or 8.77 million bushels of wheat.  This was 34% below last week and 37% below the 4-week average.  Nigeria was the top purchaser with 40k MT, followed by the Philippines at 36k and then Chile with 35k.  Corn sales were within line with expectations but did show a marked improvement coming in at 581,600 MT or 22.9 million bushels.  The top purchaser was El Salvador with 103.4k MT, followed by Japan at 97.6k and then, unknown destinations with 86.1k.  Soybean sales were down 31% from last week, but that was anticipated and still came through at a solid 1,253,000 MT or 46.05 million bushels.  China accounted for 60% of the total with 760.5k MT, followed by unknown destinations at 129.2k and then Egypt purchasing 115.3k.  Pork sales dropped off sharply, coming through at 19.9 MT, but beef sales were quite solid at 25.3 MT.