We certainly did not lack news this week. From supply/demand updates, both here and abroad, to forecasts for crops yet to come, to the actual realization that China will purchase U.S. beans once again, one might have suspected that it would have been a big week for prices as well. As it turns out though, that has not been the case. If we were to close right now, for the week March corn would be up 1-cent, March wheat up 2-cents and January beans, down 11-cents. No doubt as this “tis the season” it kept a number of people on the market sidelines and while there were a few flashes of excitement, obviously nothing to truly sustain the moves.
While the initial Chinese purchase of 1.13 MMT of beans announced yesterday did not stir up any real excitement, many in the trade are hopeful there is more in the works. This morning there was an announcement of another 300,000 MT sold China as well as 130,000 MT of beans to Unknown and 125,000 MT of corn to Japan. According to Bloomberg News, there also could be deals in the works for China to purchase as much as 3 MMT of corn as well as wheat which they need for blending purposes. Also, let’s not forget that we have seen purchases for pork over the past several weeks as well.
There does appear to be another battle that has taken shape in Washington, and this one is not the U.S versus China, but rather the Department of Agriculture versus the Office of Management and Budget. You can almost hear the announcer setting up the fight. “In this corner, you have Mighty Mick Mulvaney, the scrappy Irishmen who has never found a spending appropriation that he will not try and slash. In the other corner, we have Sonny (son of the south) Perdue, fresh off a successful fight for the new farm bill and pumped up to extend the winning streak.” Mr. Mulvaney wants to at least hold up if not eliminate the balance of the relief promised to the ag community in response to the tariffs and Perdue is ready to fight to keep them coming. Both are scheduled to square off at the White House today.
Last but not necessarily least, equity markets as swooning again this morning, suffering not only from year-end disinterest, but also heightened concerns of trade war ill effects and a slowdown in global economic growth. Without a serious recovery for the finish, this would be consecutive closes below last year’s finish, which has not happened since April. Granted, we still have a couple of weeks of trade to close out the year and another FOMC meeting in the interim, but if we close lower for the year, it will mark only the second time in the last decade that we have done so.
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