U.S. Secretary Ross Heading to Asia, Makes Positive Phase One Comments
Commerce Secretary Wilbur Ross hopes the U.S. can revive a date to sign phase one of the U.S./China trade deal.
With the Chile summit having been cancelled, Ross hopes a date for signing is set for around the same time (mid/late November).
Despite some shaky news having surfaced this week about the trade deal, Ross says the U.S. is comfortable that phase one is in good shape.
Ross also stated that some hefty transactions will be announced while he is on the trip to Thailand for a three-day summit.
China has stated it could remove extra tariffs to improve U.S. soybean demand but China appears less optimistic about a long-term agreement.
China also wants the U.S. to cancel tariffs set to be in effect December 15.
Lead trade negotiators are set to hold telephone conversations today.
FBN’s Take On What It Means: Signing of phase one of the trade deal continues to be a struggle. If the Chilean summit had not been cancelled, there still may have been delays in the signing. FBN’s stance is that a complete resolution of the trade deal is not in sight. There is no indication that the “very good-sized transactions” Ross mentioned are for actual soybean or any other agricultural goods.
Buenos Aires Reduces Argentine Wheat Crop
The exchange cut 1 MMT off of Argentina’s wheat crop in its latest forecast.
Production now is forecast at 18.8 MMT.
The exchange cited bad weather as the means of the reduction.
Argentina has had drier-than-normal conditions, reducing wheat production.
Recent frosts also have reduced yield potential.
Harvest will pick up in December.
FBN’s Take On What It Means: Poor weather resulting in a reduced crop in Argentina could be beneficial to U.S. wheat exports. USDA’s October production forecast was at 20.5 MMT. With that total, FBN was carrying an export forecast at 16 MMT. Any reduction to the crop will result in smaller exports. For instance, if the crop were to be cut to 19 MMT, FBN would reduce exports by 1.5 MMT to 14.5 MMT. This likely will help boost interest in U.S. wheat exports into 2020.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
