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By Staff | Sep 30, 2016

China beef imports

China’s premier promised to resume Chinese imports of U.S. beef soon, calling it a sign of Beijing’s sincerity to improve commercial ties with the U.S. Speaking to U.S. business groups in New York, Premier Li Keqiang said China would soon allow imports of U.S. beef.

“We also recognize that the United States has very good beef, so why should we deny Chinese customers this choice?” Mr. Li said, in one of several less-scripted moments during his remarks.

Though the premier didn’t give a specific timetable, trade groups have previously said imports may resume before the end of the year. China has had a ban in place on most U.S. beef imports since 2003.

Ag finances

Midwest bankers are reporting more financial challenges in agriculture. According to the Creighton University Rural Mainstreet Index, four-out-of-five bank chief executive officers are restructuring farm loans because of the difficult farm economy. The monthly survey of bankers in 10 Midwestern states includes Minnesota, North Dakota and South Dakota.

Twenty percent of those surveyed said the number of farm loans that have been rejected has increased.

Egyptian fungus

Egypt may suffer a lasting hangover from its ergot rumpus, despite ditching a controversial zero tolerance policy on the fungus, as traders demand a premium on deals with country even as it tries to catch up on imports. Egypt made its first wheat purchase in more than a month.

The purchase followed announcements that Egypt had axed a 0 percent allowance on ergot, a common fungus which can cause hallucinations if consumed in sufficient quantities, but which is deemed harmless in small concentrations, and typically permitted by importers up to levels of 0.05 percent.

Chiona vs U.S. DDGs

China said it is slapping anti-dumping duties on U.S. distillers’ dried grains shipped by some of the biggest suppliers of the animal feed ingredient, including Louis Dreyfus and

Archer Daniels Midland. The duties of 33.8 percent are effective immediately, the Ministry of Commerce said in a preliminary ruling. The move comes after a months-long probe following complaints by China’s ethanol producers that the U.S. industry was unfairly benefiting from subsidies.

It did not give a timing for a final decision. China is the world’s top buyer of DDGS, a by-product of corn ethanol that is used by feed mills as a substitute for corn and soymeal.

China imports almost all of its needs from the United States, the largest exporter. The move could intensify a spat between the world’s two-largest economies over agricultural trade policy, and also comes as the countries are embroiled in disputes over China’s exports of steel and aluminum.

In the near term, the impact on trade may be limited as exporters have already curbed shipments into China since the investigation started in January to avoid any retroactive penalties, traders said.


Corn closed the week 1 cent lower.

Last week, private exporters reported sale of 191,000 metric tons of corn to Mexico and 116,000 mt of grain sorghum to an unknown destination.

In the weekly export sales report, sales of corn showed a total of 36.5 million bushels (921,900 mt) with all for the 2016- 2017 marketing year.

This was above the 29.9 mb (760,700 mt) needed this week to be on pace with USDA’s September demand projection of 2.175 billion bushels.

Last week, NASS reported U.S. corn crop conditions came in at 74 percent good-to-excellent, unchanged from last week and remains above the 68 percent rating of last year.

Corn harvest advanced to 9 percent complete versus 11 percent expected and up from 5 percent last week.

This is behind the average pace of 12 percent.

The question of how big the crop will be looks to be answered in the upcoming weeks as weather forecasts look conducive to improving the harvest pace.

Early harvest yields started off as less than expected but are now improving as producers move into later hybrids. Harvest data will determine the long term direction for the corn market with long-term support near $3 likely to provide a floor for the market.

Strategy and outlook: Producers should maintain hedges until harvest lows are scored.


Soybeans closed the week 13 cents lower.

Last week, private exporters reported sales of 277,000 mt to an unknown destination; 350,000 mt of soybeans to China and 118,000 mt of soybeans to Taiwan.

In addition, there was an optional origin sale of soybeans of 120,000 mt of soybeans to China.

In the weekly export sales report, sales of soybeans showed a total of 32.2 mb (875,700 mt) with all for the 2016-2017 marketing year.

This was above the 22.6 mb (615,900 mt) needed this week to be on pace with USDA’s September demand projection of 1.98 bb.

Last week, U.S. soybean crop conditions were unchanged from last week at 73 percent g/e and remain well above the 63 percent last year.

In fact, soybean ratings for this week are the best in 22 years. Soybean harvest has advanced to 4 percent done, in line with expectations and the average pace of 5 percent.

With large supplies overhanging the market, we have been forecasting rallies due to harvest delays are selling opportunities. 16 to 30 day forecasts are now calling for a change to a warmer and drier pattern, which should be ideal for harvest progress.

Yields are expected to be outstanding and traders will be fearing another production increase in the October supply/demand report.

Very strong export business will limit the downside for soybeans during harvest.

Strategy and outlook: Producers should maintain hedges until harvest lows are scored.

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