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Articles of Interest- Friday, April 26, 2019

Articles of Interest- Friday, April 26, 2019

Bulgaria Expects Wheat Harvest to be Comparable to 2018 Levels

Reuters – 04/25/2019

Bulgaria’s 2019 wheat harvest is expected to be similar to last year’s crop of 5.8 million tonnes if the weather remains favourable in the next two and a half months, a senior official at the agriculture ministry said on Thursday. “We can expect a normal harvest,” Petar Kirovski, a state expert at the ministry, told Reuters, adding Bulgaria would be able to meet its domestic demand for wheat, which is about 1.8 million tonnes, and keep exports strong. “We have had unfavourable weather in the last few months, the spring was dry with scanty rains. But the situation is now back to normal after the rains in the past two weeks.” Bulgaria is a net grain exporter and has shipped more than 3 million tonnes of its 2019 wheat production abroad so far. 90 percent has gone to European Union countries, mainly Spain and Italy.

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China’s Huge Grain Stockpiles Set to Linger Through Next Year

Reuters – 04/26/2019

China may be a minor participant in global grain trade, especially relative to the volume it consumes, but recent policy changes, the trade war with the United States, and the spread of African swine fever in its hog herds have drawn traders’ attention to all things China.The general theme of large grain stockpiles in China is not expected to change anytime soon, according to a recent report from the U.S. Department of Agriculture’s attaché in Beijing, but the prognosis is more encouraging for corn than for wheat when it comes to reducing inventory…According to USDA, about 65 percent of the world’s corn and 51 percent of the world’s wheat will be in China this year, but the country imports and exports very little…The attaché places 2019-20 Chinese wheat ending stocks at a record-high 149.7 million tonnes, some 7 percent above the previous year. Domestic consumption is seen at 124 million tonnes, meaning that China has more than one year’s worth of its wheat needs stored away. Production is seen outpacing consumption with a crop of 131.5 million tonnes, up fractionally from a year ago on better yields.

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Trump’s Withdrawal from TPP Trade Deal is Hurting U.S. Exports to Japan

The LA Times– 04/25/2019

One of Donald Trump’s first acts as president was to pull the United States out of the Trans-Pacific Partnership, the 12-nation free-trade deal that President Obama negotiated but left unfinished. Trump derided the pact as a bad deal for America. But leaving it hasn’t turned out that well either. The remaining 11 members proceeded anyway, slashing tariffs and leaving U.S. businesses at a significant competitive disadvantage. In particular, American exports of grains, meats and other farm goods to Japan — by far the biggest of those 11 economies — have taken a hit. Now the White House is scrambling to undo the damage of Trump’s swift withdrawal from what would have been the world’s largest regional trade agreement. Japanese Prime Minister Shinzo Abe arrives Friday in Washington to meet with Trump. At the top of the administration’s agenda are trade talks to level the playing field for the United States…“Give us some relief. We’re not surviving the way it is,” said Greg Svenningsen, 60, a North Dakota farmer who’s seen the cash price for his wheat plunge 25% since last fall, thanks to slumping demand from Japan and other Pacific buyers.

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Trump and Abe Meet as Japan and U.S. Try to Reach Trade Deal

The New York Times– 04/26/2019

President Trump and Prime Minister Shinzo Abe of Japan will meet in Washington on Friday as the two countries work toward a bilateral trade deal that could give American farmers more access to Japan’s market and forestall tariffs on Japanese cars. The potential for such a trade deal was almost unthinkable two years ago, when Mr. Trump pulled the United States from the Trans-Pacific Partnership, a 12-nation pact that Mr. Abe had negotiated with President Barack Obama. Japan, which formalized the now 11-country trade agreement last year, initially refused to strike a bilateral deal, insisting that the United States should instead return to the pact…On trade, the two sides may be working toward a limited deal on a range of topics that would give American farmers and ranchers better access to the Japanese market, and Mr. Trump a political victory before the 2020 presidential election. The countries could then swing back later for a more comprehensive trade agreement covering manufacturing and services.

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ADM Realigning Midwest Flour Milling Capacity

Feedstuffs – 04/25/2019

Archer Daniels Midland Co. (ADM) said this week it is realigning its flour milling footprint in the U.S. as its new high-capacity mill in Mendota, Ill., nears opening. In the coming months, the company will end production at its Nokomis flour mill in Minneapolis, Minn., and its flour mill in Salina, Kan. In addition, the company continues to plan to end production at its wheat mill in Chicago, Ill., when the Mendota mill opens later this year. “We are continuing to see strong demand for flour in the Midwest, and the changes we are announcing today, along with the opening of our new state-of-the-art mill in Mendota later this year, will perfectly position ADM Milling to meet customer needs throughout the region,” said Chris Cuddy, president of ADM’s Carbohydrate Solutions business. “The three facilities we are closing in Minnesota, Kansas and Illinois are all more than a century old, and despite the great work of our teams in each location, the age of those mills significantly constrains our operations.

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Source: U.S. Wheat Associates