U.S. and China To Sign Trade Deal On January 15
The Phase 1 trade deal that was struck between the US and China in December is expected to be signed by both countries on January 15.
The trade deal is expected to reduce tariffs and boost Chinese purchases of American farm, energy and manufactured goods while addressing some disputes over intellectual property.
No version of the language has been made public.
Chinese officials have yet to publicly commit to key items such as increasing imports of US goods and services by $200 billion over two years.
Before the trade war started, China bought $130 billion in U.S. goods in 2017.
FBN’s Take On What It Means: At FBN, we believe that signing the Phase 1 trade deal is a positive for the US farmer. Despite the lack of specifics about committed U.S. agricultural commodities, volumes and time frames we believe that selected U.S. futures markets, like soybeans, are expecting increased Chinese demand.
U.S. Biodiesel Production Rises
According to the U.S. Energy Information Administration (EIA), biodiesel production rose to 144 million gallons in October from 142 million gallons in September.
Soybean oil remained the largest biodiesel feedstock, with 558 million lbs used in October, or about 51% of the total.
In September, soyoil used in biodiesel production was 599 million lbs.
The EIA publishes data on domestic biodiesel 2 months in arrears.
FBN’s Take On What It Means: At FBN, we believe that strong domestic biodiesel demand and positive producer margins have been two of the primary catalysts that made soybean oil futures one of the top performing agricultural futures contracts in 2019. We believe that tight global vegetable oil supplies combined with strong domestic demand for biodiesel can be positive for soybean oil prices in 2020.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
