This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Based on Monday’s trade, it seems that Friday’s recovery from the lows was just optimism that there was still something yet to be announced. Trump on Friday had said that farmers were going to be happy with the results of the meeting. But there was very little as far as specifics that came out over the weekend. In the last few meetings between Trump and Xi, there was no joint statement, but then the U.S. side started dribbling out details of purchases China agreed to make later. One thing we did get this time was an announcement that China agreed to drop some tariffs on some U.S. products. Soybeans were not included in that list, but corn was. One explanation for the reason soybeans were not included was so that government buyers could continue to control the pace of purchases of U.S. beans to maintain more leverage. The market did not subscribe to that explanation, as beans led to the downside on Monday. The U.S. side continues to tout the agreement by China to buy 25 MMT of soybeans and $17 billion of other agricultural products. The Chinese are on pace to buy the 25 MMT of beans, and many were hoping to get specific details of the other ag products. But it is in China’s interest to be as vague as possible on that to maintain the flexibility to be able to buy what they need, not agree ahead of time. The market did not seem to care that corn was included on the list of commodities on which tariffs were reduced, meaning it is possible that we see some Chinese purchases of corn. The markets did bounce off the lows on Monday after U.S. Trade Representative Jamieson Greer stated the U.S. and China had reached agreements on non-essential goods, but there is still no fact sheet released yet as of this recording.
Finishing off the lows on Monday is at least a little encouraging as we continue to watch the weather in the U.S. delay harvest. There will be a window to harvest, but the forecast indicates more rain coming to much of the Midwest into the weekend. We will also get the final USDA stocks report of the old crop on Wednesday at noon. That will give us final old-crop carryouts.