** 6:30 AM CBOT Futures: Mar soybeans are up .50 of a cent at $9.17, Mar corn is down .5 of a cent at $3.785 and Mar Chi wheat is down 3.50 cents at $5.1875
** AgResource Morning CBOT Comment/Analysis: Good Morning! The overnight CBOT trade has been low volume and mixed overnight. Optimism from the US/China Beijing trade negotiations is offering support while producer cash sales and declining Black wheat prices caps rallies. A firm day is expected as traders will not want to be heavily short heading into a long US holiday weekend.
The US weekly export sales report for the week ending January 3rd will be released this morning with next week being a “data dump” of US weekly export sales from January 10th to February 14th. This will get US export sales totals up to date. The release will occur during the USDA Annual Outlook Conference that will be held in Washington, DC.
China announced 7.38 MMTs of all origin soybean imports during January. This was above ship line-up forecasts and is considered slightly bullish. The yearly total is down 13%, but much of that is already being reflected in USDA’s 88 MMTs 2018/19 China soybean import forecast.
China Jan total goods exports rebounded 9.1% from a year earlier to $217.6 Bil dollars while imports fell 1.5% to $178.5 Billion. The data argues that China’s economy should stabilize amid the fresh Chinese momentary stimulus.
US/China trade talks are scoring solid progress which is pleasing US President Trump. Bloomberg is reporting that President Trump is considering a 60-day extension of the existing tariffs, while other media sources argue that President Trump and Chinese President Xi could hold a trade summit in Florida during March. In fact, USDA Deputy Sec Censky speaking at the National Ethanol Conference yesterday indicated that there is a good chance that US President Trump and Xi will hold a US/China March Trade Summit to strike a final deal.
The buzz over the amount of US ag import dollars that China is pledging to secure annually is starting to make the rounds. Most see the total in a range of $35-45 Bil. This would be massive for US agriculture and likely increase the US’s share of China soybean imports, but also include huge amounts of US corn, wheat, ethanol, DDGs, sorghum, dairy products and meats. Note that in 2017, China booked just $19.7 Bil of all US ag goods, so a potential doubling of demand would be extremely bullish for US agriculture.
The political pressures are building for the Trump Admin to end tariffs on Canada/Mexico steel/aluminum for both countries to ratify the USMCA. Canada has political elections in 2019 and their legislative calendar is tight to ratify the pact. Neither country will vote until US tariffs are removed.
ARC doubts that CBOT breaks can be sustained amid US/China trade optimism.
