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Articles of Interest- Wednesday, July 10, 2019

Articles of Interest- Wednesday, July 10, 2019

Australian Wheat Likely to Lose Competitiveness Further on Output Concerns

S&P Global – 07/08/2019

Australian wheat may further lose its competitiveness in the 2019-20 (October-September) marketing year on likely higher domestic prices led by another below-average production year and increased competition from the Black Sea. The country also faces a challenge from the growing acceptance of Argentinian wheat in Southeast Asia, its key export region. Another dry summer in key regions of Australia prompted analysts to lower their forecast for the country’s wheat production and exports. According to estimates from ABARES, Rabobank and Australian Crop Forecasters, Australia’s wheat production in 2019-20 (July-June) is expected between 18-22.1 million mt, below the five-year average of 23.22 million mt. Australia’s wheat exports for 2019-20 are estimated at 11-12 million mt, down from the five-year average of 15.92 million mt. This would be the third straight year that production and exports will be coming in below their five-year average.

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U.S., China to Relaunch Talks with Little Changed Since Deal Fell Apart

Reuters – 07/09/2019

The United States and China are set to relaunch trade talks this week after a two-month hiatus, but a year after their trade war began there is little sign their differences have narrowed. After meeting with Chinese President Xi Jinping in Japan just in late June, U.S. President Donald Trump agreed to suspend a new round of tariffs on $300 billion worth of imported Chinese consumer goods while the two sides resumed negotiations. Trump said then that China would restart large purchases of U.S. agricultural commodities, and the United States would ease some export restrictions on Chinese telecom equipment giant Huawei Technologies. But sources familiar with the talks and China trade watchers in Washington say the summit did little to clear the path for top negotiators to resolve an impasse that caused trade deal talks to break down in early May. White House economic adviser Larry Kudlow said Washington was still waiting for China to make good on what he called a “very, very important” pledge to quickly buy more agricultural products, but said there was no firm deadline for such purchases, or for finalizing an overall deal.

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Montana Wheat Farmers Turn to USMCA to Open Canadian Grain Market

The Fairfield Sun Times – 07/10/2019

There are times when the grain prices at Montana Hi-Line elevators are so low that trucking wheat to Canada seems appealing, or would be if trade terms were better. Montana wheat has never flowed freely across the Canadian border. That’s because Canada’s list of wheat varieties doesn’t include any that Montana farmers grow. Varieties not on the list are graded as “feed wheat,” meaning they’re officially recognized as fodder for livestock, but not for bread or pasta. The North America Free Trade Agreement did nothing to prevent the exclusion. Wheat groups are hopeful the U.S.-Mexico-Canada Agreement, often referred to as NAFTA 2.0, will address Canadian grain rules.  “There have been times in the last couple years where the price has been higher in Canada and there would be incentive for the Montanans to move grain there if they were near a Canadian elevator,” said Lola Raska, executive director of the Montana Grain Growers Association.

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US Winter Wheat Harvest Hits 47%, Spring Wheat Crop Ratings Improve

S&P Global – 07/09/2019

Winter wheat harvest in the US for the 2019-20 crop (June-May) hit 47% in the week ended July 7, up 17 percentage points week on week, led by big strides seen in Kansas, the nation’s largest winter wheat producer. Kansas struggled with severe wet conditions in May and early June, slowing down crop development in the region earlier. However, for the week ended July 7, winter wheat harvest in Kansas reached 61%, up from 28% in the week ended June 30, data from the US Department of Agriculture’s crop progress report released late Monday showed. Kansas sold $1.3 billion worth of wheat in 2018, according to the USDA. While winter wheat harvest progressed steadily in the latest week due to improved weather conditions, crop progress remained behind average for Montana and South Dakota, according to U.S. Wheat Associates, which looks into expanding global markets for US wheat producers. A total of 78% of spring wheat crop across key-producing states was reported to be in good to excellent conditions in the latest week, up 3 percentage points from the past week, according to the USDA report.

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Oklahoma Wheat Commission Reports the 2019 Harvest is Nearing the Finish Line at 96% Complete

Oklahoma Farm Report – 07/09/2019

Oklahoma Wheat harvest is in the final stretch and has wrapped up in most places. Producers are still having challenges in parts of North Central Oklahoma along the I-35 corridor around Tonkawa, Ponca City, Blackwell and Braman areas due to heavy moisture this past week. Producers are also wrapping up in the Panhandle regions with most areas hopeful to finish by the end of the week. While it has been an extremely challenging year across the state to get harvest completed, most areas had favorable yields, with satisfactory test weights, and decent protein levels. The Oklahoma Wheat Commission (OWC) is calling this 2019 harvest to be 96 percent complete and this will be the final harvest report conducted by the OWC for this season. Based on reports from elevator managers and producers, test weights will be in the 58 lb. to 59 lb. per bushel range. The crop was later to maturity in many parts and allowed several producers to get part of the crop harvested before some of the test weights were impacted.

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Source: U.S. Wheat Associates