Soybean futures declined in overnight trading amid uncertainty over Chinese purchases from U.S. suppliers.
The partial government shutdown has now entered its fourth week and is officially the longest on record, leaving traders, analysts, and producers without key fundamental data on which to trade.
The USDA’s Export Sales Reports have been suspended since the third week of December, and there’s no relief in sight as President Donald Trump and Democrats continue to spar over funding of his border wall.
Without fundamental news, investor seem hesitant to get too long soybeans.
Still, losses are being contained on optimism that the U.S. and China will come to an agreement on trade by the March 1 deadline. After more than two days of negotiations last week, the U.S. said one of Beijing’s top trade officials will visit Washington for high-level talks later this month.
Soybeans for March delivery fell 6¢ to $9.04¼ a bushel overnight on the Chicago Board of Trade. Soymeal lost $2 to $312.60 a short ton, and soy oil declined 0.21¢ to 28.20¢ a pound.
Corn fell ¾¢ to $3.77½ a bushel overnight
Wheat for March delivery declined 3½¢ to $5.16 a bushel, while Kansas City futures dropped 2¾¢ to $5.01¾ a bushel.
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If the U.S.-Mexico-Canada agreement (USMCA), the trade deal signed by the U.S., Mexico, and Canada last year, is implemented, it will improve quota access for dairy producers in our neighbors to the north, according to the American Farm Bureau Federation.
Senior director of congressional relations David Salmonsen said in a statement that ratification of the agreement must follow a time line, so when it’s implemented is unknown at this point.
The deal not only would improve access for U.S. dairy into Canada, but also would end the country’s Class 7 pricing and keep agricultural tariffs between the U.S. and Mexico at zero, he said in a trade update from the AFBF at its annual convention, which is being held this year in New Orleans.
While the U.S. will export more dairy products to Canada, “it isn’t going to be a major mover of the market, as Canada’s total population is 36 million people and the country has a strong domestic dairy industry … but it is a positive sign for U.S. agriculture,” said AFBF director of congressional relations Veronica Nigh.
Exiting the North American Free Trade Agreement would be a bad idea because old tariffs that haven’t been seen in more than two decades could return, she said.
Nigh also discussed the ongoing trade row with China, saying U.S. ag exports to the Asian country were down by $2 billion in 2018. The USDA now expects exports to decline by an additional $7 billion this year.
China will move from the second-biggest export destination to the fifth largest in 2019. The biggest concern, Nigh said, is that many countries may take this opportunity to build a relationship with China.
“We could lose the market even if the tariffs eventually go away, and it would take time to restore these markets,” she said.
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Today’s 3 Big Things from Successful Farming magazine is brought to you by Golden Harvest Seeds.
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Dense fog warnings have been issued for a large chunk of central Illinois and eastern Iowa this morning, which is reducing visibility and making some spots slick as the fog freezes, according to the National Weather Service.
Visibilities are expected to be around ¼ mile in the affected areas through about 8 a.m., the NWS said in a report early this morning.
There’s also a slight chance of freezing drizzle and flurries starting this evening in parts of eastern Iowa and northwestern Illinois, the agency said. That also could lead to slick roads.
“There may be some lingering freezing drizzle Tuesday morning, especially along and east of the Mississippi River,” the NWS said. “Another system may bring some light snow or even a wintry mix to portions of the outlook area late Wednesday night through Thursday morning. How far north or south this system will track and how much of the local area it will affect is still uncertain at this time.”
A larger storm that could bring snow to the region may move in toward the end of the week, the service said.
