Trump’s Mexican Tariff Hike ‘Shocks’ Wheat Growers
Capital Press – 05/31/2019
National wheat organizations say they are “shocked and dismayed” by President Donal Trump’s plan to impose a 5% tariff on all Mexican goods imported by the U.S. Trump’s tariff would go into effect June 10. It would gradually increase — up to 25% — “unti the illegal immigration problem is remedied,” Trump said in a Twitter post. “We respectfully ask the administration not to implement these new tariffs,” Chris Kolstad chairman of U.S. Wheat Associates and a wheat farmer near Ledger, Mont., said in a press release. “The potential fallout for farmers would be like struggling to survive a food then getting hit by a tornado. U.S. Wheat Associates and the National Association of Wheat Growers also said the action threatens to undermine approval of the U.S.-Mexico-Canada Agreement and puts crucial wheat demand in Mexico at great risk. Darren Padget, a Grass Valley, Ore., farmer and U.S. Wheat secretary-treasurer, said he will be in Mexico June 2-4 as part of a U.S. Wheat conference for customers. The conference is partly to remind Mexican customers how important they are to the U.S. wheat industry. It is funded by the Agricultural Trade Promotion program because U.S. wheat farmers proved they were being hurt by other retaliatory tariffs, according to U.S. Wheat.
Tariffs Threaten No. 1 Customer
FarmProgress – 05/31/2019
Tariffs are in the news again today and markets are lower. Today’s news doesn’t involve China, however. The new tariffs looming against Mexican imports target the largest buyer of U.S. corn and wheat this year. Mexico also buys significant quantities of soybeans, ranking third, as the destination of one-in-ten export bushels. Present Trump said he will slap a 5% tariff on Mexican imports effective June 10, with the penalty escalating to 25% in October if illegal immigration across the southern border isn’t halted. The move comes after the U.S. recently removed tariffs on Mexican steel and aluminum while the administration pushes for Congress to approve the new trade deal with Canada and Mexico that replaces NAFTA. The latest trade news obscured what was actually a decent weekly export sales report this morning for both corn and wheat. Net new bookings of corn improved to 38.7 million bushels, all but 3 million of it for old crop. The total easily beat the rate needed through the end of the marketing year Aug. 31 to reach USDA’s current forecast for the 2018 crop. Shipments as expected were also good at 41 million bushels, despite a river system expected to be closed north of St. Louis for at least another two weeks.
Researchers Trace the Genetic History and Diversity of Wheat
Phys.org – 05/30/2019
A team of researchers from Université Clermont Auvergne and BreedWheat in France and the International Wheat Genome Sequencing Consortium in the U.S. has conducted genomic testing of thousands of wheat types to trace the genetic history and diversity of wheat. In their paper published in the journal Science Advances, the group describes their study of the history of wheat domestication and how it has come to exist in its present state. Wheat is, of course, one of the main crop staples in the world today. The BBC recently reported that it now comprises approximately 15 percent of human caloric intake. Prior research uncovered evidence indicating that wheat was first domesticated approximately 8,000 to 10,000 years ago in the Fertile Crescent—though some anthropologists have suggested the opposite occurred. They propose that it was wheat and other crop staples that domesticated humans rather than the other way around—instead of relying on the wind to carry its seeds, they note, wheat now has humans planting its seeds all over the world. In either case, the researchers with this new effort sought to get a better view of the history of wheat domestication.
Spring Wheat Riding Cottails of Corn, Winter Wheat
AgUpdate – 06/01/2019
The spring wheat market continues to draw strength from 2019 crop concerns, primarily with corn and winter wheat. Nonetheless, it is providing a boost in prices. “The big thing with corn is since May 1 the corn market has been up 60 cents a bushel, so a pretty dramatic run-up in value,” said Jim Peterson, marketing director for the North Dakota Wheat Commission. One reason for corn values rising is that this is a historically late corn planting season and there’s starting to be a lot of concern over final acres. Even though producers can plant some shorter maturing varieties, obviously they’re going to be giving up some yield and risking a fall frost, according to Peterson. “There probably does come a point where it will simply be too late and producers will do a prevented plant crop option, which could dramatically cut corn acres in in some pretty high yielding states,” he said. As of May 20, nationally the corn crop was only 49 percent planted. That’s more than 30 percent behind the normal planting rate of 80 percent. Probably more importantly, the three states where there is concern is Illinois, Indiana and Ohio where as of May 20 only 10-25 percent of their corn was planted and normally they’re at 80 percent by that date. “That’s been the big catalyst for this rally. The other is just significant rains across the hard red and soft red winter wheat areas,” Peterson said, adding that Kansas had 11 inches of rain over a one-week period in May. Also, the crop is just starting to reach the flowering stage to early heading in some of those states, so it’s pretty vulnerable to wet weather at that time.
NGFA Calls on STB to Create Guidance on Rail Demurrage, Accessorial Charges
The National Grain and Feed Association (NGFA), on behalf of the North American Millers’ Association and others, urged the Surface Transportation Board (STB) to develop policy principals or guidance to discipline Class 1 railroads’ demurrage and accessorial charges and practices at a two-day public hearing May 22-23. “NGFA believes it is very clear that the STB needs to step in and take action to provide policy and guidance to restore balance to demurrage and accessorial practices, and it has the authority to do so as an outcome of this proceeding,” the NGFA said. The NGFA’s testimony and previously-submitted written statement to the STB highlighted numerous specific examples of demurrage and accessorial tariffs that are not commercially fair, practicable or reciprocal, and incur millions of dollars in charges to individual rail customers even amid efficient operations. The NGFA cited data submitted by the seven North American Class 1 railroads to the STB showing more than $1.43 billion generated from demurrage and accessorial charges from all rail customers in 2018, up 29% from 2017.
Source: U.S. Wheat Associates