China Restricts Canadian Grain Processor
Not immediately clear why Richardson International's exports into China have been halted
China Blocks Canadian Canola Shipments From Richardson International
Amid heightened political tensions China blocked all canola exports from Canadian agri-exporter Richardson International Ltd.
The move comes amid heightened tensions between the two countries in a dispute over trade and telecom related technology that has ensnared the chief financial officer of the world's largest telecommunications equipment maker, Huawei Technologies Ltd. who faces criminal charges in the U.S.
It wasn't immediately clear why Richardson's exports into China, the world's top importer of canola, had been halted. Officials at China's General Administration of Customs did not offer any comments about the situation.
An extended ban on Richardson's canola exports would be problematic for Canada's biggest grain handler and could have broader ramifications for the Canadian economy.
Oilseeds, which are led by canola, are a leading component of Canada's biggest China export category and composed nearly 17% of all exports in 2017.
How Does This Impact the U.S. Farmer? Perhaps not a direct net benefit to the U.S. soy producer as canola and soybeans are not fungible. It would be a “guesstimate” at best to make the assumption that a decline in Canadian canola exports would have a positive impact on the U.S. soy export program. While the lost export volume from Richardson can be assumed by another Canadian company, these types of political variables can serve as a stark reminder that the Chinese can ban agricultural exports on any company at any time for what appears to be for any reason.
Export Sales Announcement
Private exporters reported to the U.S. Department of Agriculture export sales of 100,500 metric tons of corn for delivery to Colombia during the 2018/2019 marketing year.
Russia 2019 Wheat Production Estimated +4% YoY
The Russian Agriculture Ministry released an updated 2019/20 all-wheat forecast for the country and estimates production between 75-78 MMT, or at least +4% YoY.
The Ministry is forecasting that Russian 19/20 grain production at 118 MMT or +5% YoY.
While still early and the wheat hasn’t broke dormancy, the Russian government’s all wheat production estimate has been made on an winter hydrological configuration and minimal threats of winter kill.
The 75-78 MMT production would be higher and at the upper end of a normalized production range, but still smaller than the 85 MMT crop in 2017/18.
How Does This Impact The U.S. Farmer? While there is still a long way to making a crop any upward adjustments to Russian wheat and all-grain production is not positive for U.S. hard wheat milling exports. With 2019/20 U.S. wheat winter wheat acres declining to a multi-generation low, any increase in Russian wheat production can pressure U.S. HRW prices will continue to make U.S.wheat the supplier of last resort. The probability of increasing feed barley exports from Russia can also be a bearish variable for U.S. corn exports as well.
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