Trump Secures Trade Concessions With Juncker, EU to Increase Soybean Imports
President Trump met with EU Commission President Jean-Claude Juncker at the White House and the two announced that the US and EU will “work towards zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods". President Trump also announced that the EU will increase purchases of American soybeans, as well as liquified natural gas (LNG) and will work to lower trade barriers on other US goods. In the July WASDE, the USDA raised their estimate of EU soybean imports by 1.1 MMT to 15.3 MMT.
Last week, President Trump threatened to enact 25% tariffs on all imported autos, which would deeply affect car manufacturers across Europe. The European Commission, the governmental body that directs all official EU trade policy, emphasizes that Juncker’s announcement merely serves to start a dialogue and that no official trade deal has been put in place.
Ethanol Production Rises to Seven Month High, Stockpiles See A Draw
Numbers released yesterday by the EIA show that ethanol production was 1.074 million barrels on the week ending in July 20. That is the highest weekly production level since Dec 22, 2017. Ethanol stocks drew down to 21.653 million barrels, down 115,000 barrels week over week and the lowest level of inventory since June 15. A new decision from the EPA allows for sorghum oil to gain feedstock status for biodiesel manufacture. This means that ethanol plants that grind sorghum and extract oil from it are now able to sell the by-product into the biodiesel market. The EPA also notes that biodiesel made from sorghum oil reduces greenhouse gas emissions by 82%.
Soybean Export Numbers Make a Strong Showing
Old crop soybean sales came in at 538,100 MT, compared to last week’s 252,300 MT, and is 69% higher than the 4 week average. Top buyers were the Netherlands, Mexico, and Egypt. New crop sales totalled 963,800 MT, an increase of 350,400 MT week over week. The biggest buyers were unknown, Pakistan, and Mexico. Old crop corn sales came in at the low end of analysts’ expectations at 338,500 MT, a decrease of 47% from last week and 42% from the 4 week average. Major buyers were Mexico, South Korea, and Israel. New crop sales were bolstered by continued purchasing from Mexico, South Korea, and Japan. New crop wheat sales were 385,900 MT, showing an increase of 29% from last week and 7% from the 4 week average. Unknown destinations, South Korea, and Nigeria accounted for the bulk of sales.
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