American Farmers Fear Trade War With China
Dan Flynn | Feb 28, 2018 10:36AM ET
Good Morning!
This morning with start off the day with 4th Quarter GDP at 7:30 A.M., Chicago PMI at 9:00 A.M., EIA Energy Stocks at 9:30 A.M. and Dairy Product Sales at 2:00 P.M.
Ethan Warrick Editor wit Wealth authority, wrote a story that China the Asian Superpower has emerged as one of the top trading partners in U.S. agricultural sector. According to the U.S. Department of Agriculture, China represents the top Soybean importer and buys more than half of all Soybeans grown by Americans. The figure for 2016 was a whopping 14.2 billion, with American coarse Grain hitting 1 1 billion. Paul Burke with the U.S. Soybean Export Council reportedly mentioned, “If there are increased trade tensions, Soybeans could likely be a potential target in any Chinese retaliation.” Tariffs aside this would be the wrong year to switch their business to South America with the Argentine drought. Today is First Notice Day on March Grains so we rollover to the May contract, which is currently trading at 380, which is ¾ of a cent higher. The trading range has been 380 ¼ to 378 ¼. The meeting with President Trump and senators representing both Oil and Corn industries failed to reach an agreement on biofuels policy to refiners. The good news is that both sides are talking. On the Ethanol front the April contract is currently trading at 1.488 which is .002 lower. The trading range has been 1.490 to 1.486. The market is currently showing 1 bid @ 1.486 and 1 offer @ 1.479 with 5 contracts changing hands and Open Interest at 1,042 contracts.
On the Crude Oil front last night’s API Energy Stocks showed builds in Crude Stocks at 933 thousand barrels, Gasoline Stocks up 1.914 million barrels, while Distillates showed draws of 1.437 million barrels and Cushing, Oklahoma showed further draws of 1.277 million barrels. The report was overall bullish but with Jerome Powell the new FED Chief testifying to Congress said the economy is in good shape with Consumer Confidence leading the way scared investors that there will be more Interest Rate hikes, which sold the Stock Market off and spilled over into the Energy complex. Europe’s cold winter had a lot to do with sagging Distillate inventories which is not happy news for farmers. The Energy Information Administration (EIA) will release its data this morning, which should confirm tight supplies and increasing demand whatever the International Energy Agency (IEA) spews out. In the overnight electronic session the April Crude Oil is currently trading at 6300 which is 1 tic lower. The trading range has been 6310 to 6253.
On the Natural gas front the market is attempting to spark one more push to get above the $3 level but currently does not look to be in the cards with current fundamentals In the overnight electronic session the April contract is currently trading at 2.693, which is 1 cent higher. The trading range has been 2.698 to 2.659.
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