U.S. Wins WTO Dispute Over China Farm Policies, Lighthizer Says
Bloomberg – 02/27/2019
U.S. Trade Representative Robert Lighthizer on Wednesday told lawmakers that the U.S. won a key World Trade Organization dispute against China’s agricultural policies. The U.S. has two pending disputes at the WTO dating back to 2016 that allege Beijing deployed $100 billion worth of illegal farm subsidies and imposed unfair import quotas that harm U.S. corn, rice and wheat producers…”If China appeals the U.S. claims, they “could be among the first to get stuck in legal limbo without a functioning appellate body,” Ben Conner, the vice president of policy at the Washington-based U.S. Wheat Associates, said in an interview.
Russian Wheat Discounts to Australian Wheat at its Narrowest in 9 Months
S&P Global– 02/27/2019
Russian 12.5% protein wheat’s discount to Australian Premium White wheat has narrowed to its smallest spread in nine months at $34.75/mt as assessed by S&P Global Platts.Weak buying interest buying interest Australian wheat has seen prices for it peter out while strong exports and buying from Russia earlier on in the year saw its wheat hit four-year highs. The high prices seen for APW early in January at nearly $300/mt have shriveled to $268.75/mt Wednesday as buyers seek out US and EU alternatives to fill their stocks. Meanwhile, Russian wheat catapulted itself to a four-year high at $247.50/mt early February.
Analysts Expect Mostly Steady Commodity Markets
World-Grain – 02/28/2019
Large global and domestic supplies of wheat, corn and soybeans will limit short-term price gains, while record cocoa bean production will keep stocks high and the dairy market must contend with growing competition from Europe, analysts said at the International Sweetener Colloquium on Feb 26. The removal of Chinese tariffs will “not be a big impact on soybeans,” said Stephen Nicholson, senior analyst, Rabo Agrifinance.“The market expects a trade agreement,” he said, predicting a “quick blip” as pipelines are refilled but not a lot of longer-term upside for the “extremely bearish” soybean market with record domestic stocks and global stocks the second highest on record. He expects soybean futures around $9 a bushel in the fourth quarter, down about 40¢ from current November prices, with upside resistance at $9.70 per bushel. There is a lot of competition, the United States is losing market share to Brazil, and the Black Sea region is gaining soybean export share, just as it has done with wheat exports, he said.
USTR Seeks to Kick Off Trade Talks with Japan as Early as March
Agri-Pulse – 02/27/2019
U.S. Trade Representative Robert Lighthizer said Wednesday he is planning on officially starting negotiations with Japan next month for a bilateral free trade agreement. “We can start the actual negotiating,” Lighthizer said while testifying at a House Ways And Means Committee hearing. “We feel a real urgency because of the combination of market access from TPP and Europe … And it’s going to have a real effect on our farmers.”U.S. agriculture groups have been clamoring for a trade pact with Japan, a major importer of beef, pork, wheat and other commodities, ever since President Donald Trump pulled the U.S. out of the Trans-Pacific Partnership, a Pacific Rim trade deal that included Japan. That pact recently cam into force without the U.S., prompting Japan to lower ag tariffs, but not for U.S. exporters.
Disregarding the USMCA isn’t an Option
Brownfield Ag News – 02/27/2019
Farmers at Commodity Classic say they will continue their call on Congress to finalize major trade deals this year. National Association of Wheat Growers treasurer Dave Milligan of Michigan says not ratifying the USMCA isn’t an option. “Well we don’t want to talk about that, it certainly won’t help at all. They did get bipartisan support for the farm bill so hopefully they’ll be able to get bipartisan support for this.” He says the agreement resolves unfair grading practices of U.S. wheat imports into Canada and levels the playing field between the two countries.
Source: U.S. Wheat Associates