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Traders are still waiting for the signing of the phase 1 trade deal between the U.S. and China. Reports circulated that it might occur at the APEC Summit in Chile in mid-November, but the meeting was canceled because of political protests. Concerns are that if the signing lingers, a deal could be jeopardized. For months, emotions have been on a roller coaster as negotiations have run hot and cold leaving the ag industry perplexed. Meanwhile, in other developments, harvest continues to creep along at 41 percent complete versus the average of 61 percent. Expectations are that the November 8th Crop Report will show a reduction in yield and harvested acres because of the bizarre weather during the growing season. While that may happen, we still face the fact that exports are horrendous. Last week, inspections were a meager 14.9 MB and must average 40.9 MB each week to reach USDA’s projection of 1.9 BB. Currently, shipments are on track for 937 MB.
Traders are hopeful that an eventual trade agreement with China will be a boon for soybean business. A lot of emotional energy has been expended over the past several months in the buildup to a deal. If the agreement does not live up to its billing, there will be tremendous disappointment. Be advised that over the years, the U.S.’s share of global exports has fallen to 37.9 percent while Brazil’s has grown to 49.7 percent. Recapturing lost business is almost impossible to achieve. Meanwhile, last week, export inspections were a marketing year high at 57.6 MB exceeding the average of 33.6 MB that must be shipped each week to achieve USDA’s projection of 1.775 BB. China took 19.6 MB, the most seen in several weeks. However, be aware that the export pace tends to peak in November and decline the rest of the marketing year. In other developments, harvest continues to lag at 62 percent complete versus the average of 78 percent.
Wheat continues to be short on news. Winter wheat planting is running toward the finish line at 85 percent complete compared to the average of 82 percent. Recent showers in Argentina will benefit their wheat crop while Australia continues to be dry. Export inspections last week were mostly a nonevent but were above the average of 18.0 MB that must be shipped each week to achieve USDA’s target of 950 MB. Currently, shipments are on track for 940 MB.
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