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AgriVisor Morning MarketWatch

 
Wednesday, January 15, 2020
Nearly all attention today will be on the scheduled signing of the Phase 1 trade agreement between the United States and China. The actual signing itself is not as interesting as what the actual volume of imports will be. Officials from both sides have now stated these details will be available as soon as signed. While there has been much hype leading into this, not all are expecting to see a surge in demand. One reason for this is that China already is thought to have immediate soybean needs covered, and in the past week has actively booked soybeans from Brazil. There are also doubts over China’s ability to import commodities at a volume that is being given. There are thoughts that energy products may make up a bulk of the import projections, leaving commodity demand little changed. Chinese officials have also started that the signing of Phase 1 does not end the trade war, it simply prevents it from further escalation. Aside from this event, the NOPA crush report for December will be released today and trade is expecting to see record soybean consumption for the month. Once all this data is released, trade will start looking for its next source of fresh news. Trade will likely start to focus more on South America as harvest gets underway in those countries. Private analysts have upped Brazil’s soybean crop potential in recent weeks so more attention will be on early activity. Trade will also focus more on South American weather to see how later crops finish out and if as much double cropping will take place as expected. US weather is also becoming more of a market factor as saturated regions of the US continue to receive rainfall. While it is way too early for this to be a factor for the spring planting season, the possibility of a repeat of last year’s conditions is worth monitoring. 

Highlights
* Phase 1 expected to be signed today
* China points out trade war not over
* US will not remove tariffs in Chinese imports yet
* Phase 1 expected to impact US acres
* Brazil economy becomes unstable
* Next round of MFP payments questioned
* Refinery waivers to be investigated
* Rains forecast for Australia
* Market again void of fresh news

Corn
* Buyers surface on breaks
* Technical resistance limits gains
* Corn loadings only 20% of expectations
* India raises import forecast 
* Quality becoming an issue

Soybeans
* NOPA crush today; 171.6 mbu usage expected
* Weak Brazilian Real hurts soy futures
* SAM weather stabilizes
* Chinese Dec soy imports highest since May 2018
* China’s 2019 soy imports at 88.5 mmt 

Wheat
* Less Russian competition
* Russia to cap exports at 45 mmt
* Nov-Jan Russian exports -11 mmt year ago
* Brazil importing US wheat
* Wheat rallies to 16-month high

Livestock
* Chinese Dec pork imports 375,000 mt
* Dec 18 pork imports were just 95,384 mmt
* Poland sees more bird flu
* Most of China’s ASF in small farms
* Wholesale beef/pork rise
 

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