U.S. – China Agree to More Trade Talks in October

Published on: 05:36AM Sep 06, 2019

Good Morning from Allendale, Inc. with the early morning commentary for September 6, 2019.

Grain Markets were mixed with corn and wheat futures edged higher, while soybean futures dropped sharply.  Corn futures found spillover strength from wheat along with moderate technical buying after hitting contract lows in the previous day session.  Corn and wheat gains were capped by declines in soybean futures as forecasts remained to show non-threatening crop weather, with few signs of frost in September.

U.S. and Chinese envoys will meet in early October for more talks aimed at ending their ongoing trade war.   The agreement on timing came in a phone call conducted by the chief Chinese envoy, Vice Premier Liu He, with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, the Chinese Commerce Ministry said.

President Trump is expected to meet with USDA and EPA officials to consider a plan that would include boosting biofuels requirements for 2020 by 1 billion gallons, according to two sources familiar with the discussions.  "The president will always seek to engage with stakeholders to achieve wins for the agriculture and energy sectors," an EPA spokesperson said.

ADM was accused of allegedly manipulating the price of ethanol to profit from a short position it was holding in the derivatives market, according to a lawsuit by a rival firm.  AOT Holdings, a Swiss company that owns an energy trading subsidiary, filed the class action complaint yesterday, claiming damages from ADM’s actions of up to $6.33 million.

USDA Weekly export sales will be released today at 7:30 a.m. CDT.  Trades estimates net corn export sales between 500,000 – 900,000 tonnes, soybean sales between 50,000 – 700,000 tonnes, wheat sales between 400,000 - 800,000 tonnes, soymeal between 125,000 – 325,000 tonnes and soyoil sales between 0 – 28,000 tonnes.

Brazil's soybean plantings are about to start in most producing regions and output is expected to increaseto a record 121.41 million tonnes (up from 115.07 million tonnes last year), INTL FC Stone said.  The USDA has projected Brazil’s crop at 123 million tonnes.  The total area is seen reaching 36.4 million hectares (89.9 million acres) in the new crop.

Argentina’s union workers at grains crushing plants began a national strike over wages, complicating exports in the country.  The union said the strike was part of "a plan to fight against the lack of responses" by management over the wage dispute.

Smithfield cut the hog kill numbers in half at two of their Southeast plants yesterday. These plants will not be operating at all today due to hurricane Dorian passing through these areas.

Cattle feeders readily accepted $100 cash cattle trade in the Southern Plains ($103 average last week).  The Northern Plains saw dressed trades around $167.  Iowa dressed bids were noted at $165 for high quality offerings ($171/$172 average trades last week).

Dressed beef values were lower with choice down 1.23 and select down 4.48. The CME feeder index is 138.43.  Pork cut-out values were down 0.90.