U.S. Wheat Growers Encourged by Phase One Deal with China
Capital Press – 12/13/2019
The U.S. and China have agreed to a “Phase One” trade deal that American wheat growers hope will create “tremendous” potential to boost exports. The agreement would roll back tariffs and re-open China’s market to U.S. agricultural exports. The National Association of Wheat Growers and U.S. Wheat Associates, the overseas marketing arm for the industry, welcomed the news that the two countries have “agreed on the text” of an agreement. “It sounds like this is a great step forward,” Glen Squires, CEO of the Washington Grain Commission, told the Capital Press. According to the Office of the U.S. Trade Representative, the trade deal “requires structural reforms and other changes to China’s economic and trade regime in the areas of intellectual property, technology transfer, agriculture, financial services, and currency and foreign exchange.”
Dry Autumn Cuts Ukraine Wheat Area by 10%
Reuters – 12/16/2019
Extreme dry autumn in Ukraine this year caused a nearly 10% drop in winter-wheat sowing, analyst APK-Inform said on Monday. The area that accounts for more than 95% of Ukraine’s total output fell to 5.93 million hectares (59,300 sq km) this year from 6.64 million hectares, the consultancy said in a statement. Some regions reduced the winter-wheat area by 22%-25%, while the sowing area in Kiev region dived 39%, APK-Inform said. “The completion of sowing in most areas took place practically in dry soil. Only due to strong fog and abundant morning dew in many areas (helped) form small moisture reserves in the upper layers of the soil,” it said.
Wheat Crop Size Under Pressure
North Queensland Register – 12/16/2019
The final size of the Australian wheat crop remains under pressure as WA downgrades the estimate of its crop by another 470,000 tonnes to 5.38 million tonnes, down 4.77mt on last year’s crop. A few days earlier the United States Department of Agriculture cut the Australian crop to 16.10mt, and at the start of December ABARES put the Australian crop at 15.852mt. There is now talk that the Australian crop will end up under 15mt. Wheat exports from Australia (June to July basis) have also been revised down to a 12-year low of 9.22mt, and down 580,000t year on year. Previously there had been an expectation that wheat exports would lift slightly this year, but pressure on WA production is putting an end to that view.
US: China Agrees to $40-50 Billion in Annual Ag Purchases for Two Years
China has agreed to purchase $40 billion to $50 billion in U.S. agricultural commodities annually for two years as well as remove significant ag trade barriers, a senior Trump administration official told reporters Friday. The exact text of the “phase one” deal was not yet ready for publication, but U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He are tentatively scheduled to sign the finalized document in the first week of January, the administration official said. “In the agriculture area, we’re looking at commitments to make purchases in each of the next two years of $40 to $50 billion … Those are going to be significant increases,” the official said. he U.S. exported a record $26 billion worth of ag to China in 2012.
Argentina’s New Government Hikes Export Taxes on Disgruntled Farmers
Reuters – 12/14/2019
Argentina’s new government has hiked export levies on soy, wheat and corn, according to an official decree on Saturday, hitting farmers in the grains exporting nation to raise revenue needed to avoid default on a mountain of looming sovereign debt. Center-left Peronist Alberto Fernandez, who took office on Tuesday, boosted the rate for soybeans, soyoil and soymeal to 30% from about 25% and lifted the levy on corn and wheat to 12% from around 7%. The decree also raised beef export taxes to 9% from 7%. Argentina’s farmers, already hit by high financing costs, inflation and a dry spell, had widely expected their profits to take a hit from some sort of tax hike, with the government facing restructuring talks on about $100 billion in debt.
Source: U.S.Wheat Associates