President Trump suggested on late Monday that enough progress had been made in negotiations with the Chinese that he intended on signing Phase one of the trade deal in November. This coincides with an article out of the South China Morning Post this AM reporting that Chinese President Xi and President Trump are tentatively expected to meet on November 17 with the aim of signing an interim trade deal. If everything goes smoothly, the two leaders are expected to come face-to-face immediately after the Asia-Pacific Economic Cooperation (APEC) summit in Santiago, Chile.
China still desires the cancellation of some of the existing and planned tariffs in exchange for the large purchases of US Ag products. Export demand remains lackluster and it is assumed that the Chinese will want to secure the good based on the market conditions. This should help support spot-market prices below $9 in beans and $3.80 in corn.
That has much as much to do with South America, at this point, as anything. Ag products are squarely in the Argentine President’s cross hairs and all the uncertainty surrounding his new plan. News that Argentina was looking at raising export taxes on soybeans to 25% and corn to 7% has led to all FOB offers beyond November/December being pulled. This is huge for us given how cheap Argentine grain has been with wheat the cheapest in the world by about $10/MT and corn running about 25 cents over the board versus 58 cents over out of the Gulf.
Last nights corn harvest progress report showed the US increase by 11% from the previous week and now sits at 41% complete compared to 61% on average. A huge increase in IL to 54% was the big surprise for the week. WI is reported at 13% complete.
Snowfall over the last 24 hours should slow harvest progress in some areas of the Midwest, especially in soybeans. This will lead to an increase in corn harvest as producers that have been working to finish up soybeans will now switch to corn for the remainder of the week while beans try to dry out.
Don’t forget to join us for lunch today as Compeer Financial will be serving bag lunches from 11:00am – 1:30pm.
Have a Safe Day!