Grain News: February 28, 2019 – Too Early to Predict China Outcome
U.S. Trade Representative Lighthizer told Congress, it is too early to predict an outcome in China. The main issue with China is to stop non-economic transfer of U.S. technology. Currency issues seem more positive. He also claims that significant progress has been made with China but changes have not been resolved just by additional purchases from U.S. goods. Lighthizer stated if Congress fails to ratify USMCA (NFTA) would be catastrophe. Congress does not have to ratify the US-China deal. U.S. Trade Representative’s office formally stated they are suspension of tariff increases until further notice.
U.S. ethanol production rose to 302 million gallons ending last week. Ethanol margins improved slightly, but still in the red. Ethanol production is still off the pace needed to reach USDA’s corn for ethanol demand estimates. South Korea bought two cargos of corn. Corn is still 30 cents more out of U.S. vs South America. The Association of American Railroads said the U.S. loaded 12,700 railcars are up 1% from one-year ago.
March 8th is the next USDA supply demand report, there are indications of change to the balance sheet for corn. The report will focus on exports and corn for ethanol use. The planting intentions report is due out at the end of March along with quarterly stocks.
Funds continue to add to their short position in corn, beans and wheat. As we are getting closer to planting season, make sure to have your offers in place. Let us help you reach goals for 2019 going forward. Spring of 2020, corn on the board starts with a four and is roughly 30 cents higher than this spring.