Good Morning,
Futures are starting the week lower as traders take some profit off of the table ahead of this week’s planting progress and stocks report. Tensions are growing after last week’s meeting between negotiations between the US and China proved largely unsuccessful at resolving the ongoing dispute. The US offered up a list of 8 demands that included a cut to the trade deficit by $200 Billion by 2020 and a cutback on government subsidies. For now the dialog will continue but the likelihood that the Trump administration is going to enforce the $50 Billion in tariffs on Chinese goods in late May or June is growing. China is likely to respond to those tariffs with a 25% duty on US soybeans of its own. Essentially, China already has an “embargo” of US beans in place. With China unable to land a cargo before the 25% duties start, it will most likely avoid new US soy purchases.
In other news:
• The USDA will release its May crop production report on Thursday May 10th. This will be the first look at new crop balance sheets for wheat, corn and soybeans.
• Dryness continues in Southern Brazil but there is some rain forecasted in the 6-15 day forecasts.
• This afternoons planting progress is estimated to come in at 37% complete compared to 17% last week and 44% for the five year average. Soybean planting is estimated to come in at 13% complete compared to 5% last week and 13% for the five year average. Weather towards the end of the week may not have been favorable for planting, but progress in the south was fast paced early in the week.
Have a Safe Day!
Garry Gard
920-348-6844
ggard@didionmilling.com
