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Articles of Interest- Monday, October 7, 2019

Articles of Interest- Monday, October 7, 2019

China Makes US Wheat Purchase Ahead of Trade Talks

Agri-Pulse – 10/03/2019

USDA announced Thursday export sales of 130,000 metric tons of U.S. white wheat for delivery to China, a sale that comes one week ahead of the next round of bilateral trade negotiations. It’s the first significant purchase announcement for Chinese importers above 100,000 metric tons since China slapped a 25% tariff on the grain last year. “We are glad for this purchase ahead of the latest round of trade discussions between the U.S. and China,” said U.S. Wheat Associates Chairman Doug Goyings. “It remains to be seen if this is the start of a return to steady purchases by China. In the long run, that is what our farmers need, along with good progress toward an agreement and continued support for the rules-based trading system that has given them access to more markets.”
U.S. wheat exports to China were increasing before the trade war, but that ended when the tariff was imposed in July, 2018.

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Tight Russian Wheat Crop Not Expected to Boost Prices

The Wester Producer – 10/03/2019

Two leading analysts believe Russia’s 2019-20 wheat supplies are going to be tight but that likely isn’t enough to reinvigorate international prices for the crop. Early season drought followed by harvest rains resulted in the second-straight disappointing Russian crop. The United States Department of Agriculture is forecasting 72.5 million tonnes of production, 34 million tonnes of exports and 7.3 million tonnes of carryout. Andrey Sizov, managing director of SovEcon, a Russian agricultural consultancy, said that is a snug supply-and-demand forecast but he believes it will be even tighter than that. He is forecasting 31.6 million tonnes of exports and a paltry 6.6 million tonnes of carryout. Sizov said in an email there is a good chance the Russian government will at some point make an announcement that it is curtailing exports. Bruce Burnett, analyst with MarketsFarm, is inclined to agree with Sizov’s assessment. He noted that the USDA dropped Russia’s total supplies by 3.37 million tonnes but only reduced exports by 1.85 million tonnes. 

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Canada Working to Keep Wheat Exports in Peru

Manitoba Co-Operator – 10/04/2019

Peruvian agriculture officials have got an eyeful of Canada’s grain quality assurance system. They were in Canada the week of Sept. 9 to meet with members of our grain industry and Canadian regulators. It’s part of an effort to keep Canadian wheat exports flowing to Peru. Officials from Peru’s Servicio Nacional de Sanidad Agraria (National Agrarian Health Service, or SENSA), were in the country as part of an ongoing dispute involving weed seeds in wheat imports from Canada, said Cam Dahl, president of Cereals Canada. Peru is a long-standing and major Canadian wheat customer, but it has complained about weed seeds in Canadian wheat, which, if not addressed, threaten future Canadian wheat exports to the South American nation. Canada exported 1.2 million and 1.1 million tonnes of wheat to Peru the last two crop years, respectively, Dahl said.

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China Narrows Scope for Trade Deal with U.S. Ahead of Talks

Bloomberg – 10/06/2019

Chinese officials are signaling they’re increasingly reluctant to agree to a broad trade deal pursued by President Donald Trump, ahead of negotiations this week that have raised hopes of a potential truce. In meetings with U.S. visitors to Beijing in recent weeks, senior Chinese officials have indicated the range of topics they’re willing to discuss has narrowed considerably, according to people familiar with the discussions. Vice Premier Liu He, who will lead the Chinese contingent in high-level talks that begin Thursday, told visiting dignitaries he would bring an offer to Washington that won’t include commitments on reforming Chinese industrial policy or the government subsidies that have been the target of longstanding U.S. complaints, one of the people said.

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Slow Wheat Harvest, Quality Issues Push Prices Up

AgUpdate- 10/05/2019

Harvest issues, including frequent rain, slow progress and reduced quality in some areas, continued to be at the forefront for the wheat market during the latter half of September. Those issues, however, were responsible for a notable run-up in values for higher quality spring wheat, according to Jim Peterson, marketing director for the North Dakota Wheat Commission. “As we hit October, we did see some sell-off and some setback on that momentum, but there’s a lot of evidence on quality damage that has already been done to both the U.S. and Canadian spring wheat crop,” Peterson said. “There’s still a lot of concern about what will be the final harvested bushels in both countries as well as quality.”

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Source: U.S. Wheat Associates