First Thing Today: Trump Announces Deal with China to Boost Exports

Farm Journal logo

Good morning!

Corn choppy, soybeans lower overnight... Corn futures are narrowly mixed after a quiet overnight session. Soybeans favored the downside overnight and most contracts are currently 2 to 3 cents lower. Wheat futures are fractionally to a penny lower. The U.S. dollar index is marginally higher, while crude oil futures are posting similar losses.

Trump administration announces deal with China to boost exports... The plan would boost access to the Chinese economy for beef producers, electronic-payments providers and natural-gas exporters. Under the deal China will reopen its market to U.S. beef no later than July 16, 2017. The countries also agreed to resolve outstanding issues for the import of Chinese cooked poultry to the U.S. by the same date. China also pledged to accelerate the process for approving U.S. biotechnology products and to allow Chinese companies to import more gas. China also pledged to take steps to allow U.S. electronic-payments firms to seek licenses by mid-July, giving them "full and prompt access," according to the White House fact sheet. Commerce Secretary Wilbur Ross says U.S./China relationships are "hitting a new high."

Other key USDA positions reportedly to be announced... As part of USDA's reorganization, sources signal the possible new spots include:

  • Deputy Secretary: Steve Censky, currently CEO of the American Soybean Association, who worked at USDA in the Reagan and George H. Bush administrations.
  • Undersecretary for the new Farm Production and Conservation: Bill Northey, Iowa’s agriculture commissioner. The position includes overseeing the Farm Service Agency, Risk Management Agency and the Natural Resources Conservation Service.
  • Undersecretary for Trade and Foreign Agricultural Affairs: Ted McKinney, Indiana’s state agriculture director. He is close to Vice President Mike Pence and is a former director of global corporate affairs for Elanco Animal Health.

Demand remains strong at Chinese corn auctions... China sold 335,337 MT of its 2011 and 2012-crop corn from its reserves for an average price of 1,331 yuan ($192.87) per MT at its latest auction. This represented 74% of the available supplies. The country was not able to move any of the 2011 and 2012 imported corn it put up for auction.

French wheat crop ratings break streak of declines... FranceAgriMer reports that 76% of the French soft wheat crop is in good to excellent condition as of May 8, which is a one-point improvement from the week prior. Previously, conditions had declined for four consecutive weeks. But rains have helped stabilize crops.

CME group removes force majeure at most shipping stations along Illinois River... CME Group yesterday lifted most of the force majeure conditions at most (but not all) corn and soybean shipping stations along the Illinois River. The exchange declared the force majeure at most exchange-approved regular facilities along the Illinois River on May 4 because high water levels and flooding made loading out impossible.

Asian demand has some Brazilian farmers considering GM-free beans.. Growing demand for non-genetically modified soybeans is reportedly encouraging some farmers in Brazil's top bean producing state of Mato Grosso to switch to conventional seed. The state's drive to plant more conventional soybeans is backed by three trading firms that pay a premium for such supplies, including Amaggi SA, which is owned by the family of Ag Minister Blairo Maggi. But growing non-GM crops can also be quite expensive and only a limited amount of conventional seed is available. Thus, only around 13.6% of Brazil's 2016-17 bean crop is GMO-free.

Cotton AWP edges lower; upland cotton import quota #3 established... The Adjusted World Price (AWP) for cotton will be 68.69 cents per pound, effective today, down from 69.75 cents per pound the prior week and the first time in two weeks the AWP has been under 69 cents per pound. Meanwhile, special import quota for upland cotton #3 will be established May 18, 2017, for 13,588,518 kilograms (62,411 bales) of upland cotton purchased not later than Aug. 15, 2017, and entered into the U.S. not later than Nov. 13, 2017.

Mexico eyes Middle East meat market... Mexico should have 15 plants certified to produce halal meat by the end of 2017, which is up from six plants currently, according to data from the country's cattle growers association AMEG. Mexico has been working to reduce its dependence on the U.S. due to mounting trade tensions. This has firms eying the Middle East, where most meat is imported from non-Muslim countries using animals slaughtered via the halal method as directed by Islamic law. Mexico plans to boost exports of halal beef from 11 million pounds (5,000 MT) this year to 44 million lbs. (20,000 MT) by the close of 2018.

More lower cash cattle trade... Some additional cash cattle action took place yesterday mostly in the $137 to $139 area, though Kansas did see fairly active trade around $135. Futures had a negative response to lower cash trade yesterday, but the fact that the futures market is still sharply below this week's cash prices could spur some fresh buying ahead of the weekend. Plus the Goldman Sachs roll should be wrapped up and beef prices continue to climb.

Futures' premium to the cash hog index a limiting factor... Cash hog prices have strengthened recently, pushing the cash hog index to its highest level of the month. The May contract will expire today, meaning the June contract will take over as the front-month at more than a $9 premium to the cash index. This is overly wide, which will likely limit buying at week's end.

Overnight demand news... Algeria bought around 470,000 MT of milling wheat and 75,000 MT of animal feed barley from optional origins, with some saying the barley will come from the Black Sea region.

Today's reports:

 

 

 

 

Latest News

Cash Fed Cattle 5 Weeks Steady

The first week of March saw warm temperatures across most of the Central Plains, but cash cattle prices were frozen in neutral with feeders unable to wrangle additional market leverage.

Vaccine Available To Kansas Meatpacking Workers

Kansas Gov. Laura Kelly said Thursday that every meatpacking plant worker in Kansas who wants a COVID-19 vaccination can get one by the end of next week.

2021-2022 Henry C. Gardiner Scholarships Winners Announced

Five Kansas State University students were named recipients of the 2021-2022 Henry C. Gardiner scholarships, awarded to students meeting rigorous criteria and exhibiting a commitment improving the beef industry.

Norbrook® Launches Cefenil® RTU Generic Injectable

Norbrook, Inc. launches Cefenil® RTU – generic ceftiofur hydrochloride injectable for treating common diseases like swine bacterial respiratory disease and foot rot, bovine respiratory disease and metritis in cattle.

Star Ranch Angus Brand Refresh

Carrying branded programs such as Tyson's Star Ranch Angus beef has benefits for both retailers and consumers. Shoppers still associate branded programs with better quality, better value and more consistency.

Embracing the Positives in Sustainable Cattle Production

Cattlemen are the original climate heroes, preserving natural resources, while producing safe, affordable and abundant protein. Speakers at NCBA's Winter Reboot discussed how cattle production contributes to society.