Argentina

New U.S.-Argentina Trade Deal Opens Door for Dairy Exports

Tue, 10 Feb 2026 16:40:24 GMT

A newly signed trade agreement between the U.S. and Argentina is creating new opportunities for U.S. dairy exports, with industry leaders pointing to meaningful progress on both tariff reductions and long-standing trade barriers.

The U.S. Dairy Export Council (USDEC), National Milk Producers Federation (NMPF) and Consortium for Common Food Names (CCFN) welcomed the U.S.-Argentina Agreement on Reciprocal Trade and Investment, finalized Feb. 5. The agreement includes specific provisions aimed at improving market access for U.S. dairy products while protecting the use of common food names that have become a growing point of contention in global trade.

As part of the deal, Argentina committed to eliminating tariffs that currently reach as high as 28% on select dairy products, including milk powders, dairy proteins, lactose and other dairy ingredients. The agreement also establishes a 1,000-metric-ton quota for certain U.S. cheeses entering the Argentine market.

In addition to tariff relief, the agreement addresses nontariff barriers that can complicate exports. Argentina agreed not to impose processing facility registration requirements on U.S. dairy plants and to provide explicit protections for 39 common cheese names, including Parmesan.

“The commitments secured in the U.S.-Argentina reciprocal trade deal bring new, real opportunities for our dairy exports to South America,” says Krysta Harden, USDEC president and CEO. “USDEC appreciates USTR’s (U.S. trade representative’s) hard work in securing agreements that lower tariffs and meaningfully address nontariff barriers, particularly those to protect common cheese names. We look forward to building our market presence in Argentina as the agreement is implemented.”

Beyond tariff and market‑access details, industry organizations say trade agreements such as this one can shape broader market conditions, including milk demand and longer‑term stability.

“Trade deals like this bring dairy farmers promise for the future,” says Gregg Doud, president and CEO of NMPF. “Dairy farms operate 365 days a year, and the U.S. negotiating team is keeping pace to secure new market access. NMPF will continue to work with the Administration as all the reciprocal trade agreements are translated into real results on the ground for our farmers.”

Protection of common cheese names was also a central priority for CCFN, especially as the European Union continues to pursue trade agreements that seek to restrict the use of terms U.S. producers consider generic.

“Argentina’s commitment to protect 39 common cheese names and 10 generic meat terms could not have come at a more important time,” says Jaime Castaneda, CCFN executive director. “As the European Union is advancing toward implementation of its trade agreement with the Mercosur bloc of countries, our ability to use common names is increasingly at risk. We cannot thank Ambassador (Jamieson) Greer and the USTR negotiating team enough for the foresight and leadership in protecting U.S. exporters’ rights.”

The Argentina agreement follows recent reciprocal trade deals the U.S. signed with El Salvador and Guatemala that also include commitments to prevent barriers to U.S. dairy exports.

Trump Signs Executive Order Quadrupling Beef Imports from Argentina to Keep Ground Beef Affordable

Fri, 06 Feb 2026 22:39:03 GMT

In a move aimed at easing pressure on U.S. beef supplies and keeping prices in check for consumers, President Donald Trump signed a proclamation on Feb. 6, 2026, temporarily quadrupling imports of lean beef trimmings from Argentina under the U.S. tariff-rate quota (TRQ).

The action comes as USDA confirmed just last week the U.S. cattle herd is now at a 75-year low . Not only are producers showing no signs of herd rebuilding, the White House says low cattle supplies can be attributed to droughts and wildfires in 2022 that impacted key U.S. cattle-producing states, including Texas, Kansas, Nebraska and South Dakota, which have constrained domestic beef production.

Compounding the supply challenges are restrictions on cattle imports from Mexico following detections of the New World screwworm have limited feedlot stocks, contributing to a record-low U.S. cattle herd.

“As President, I have a responsibility to ensure that hard-working Americans can afford to feed themselves and their families,” the proclamation states. “To increase the supply of ground beef for U.S. consumers, I am taking action to temporarily increase the quantity of in-quota imports of lean beef trimmings under the U.S. beef TRQ.”

The proclamation authorizes an 80,000 metric ton increase in in-quota lean beef trimmings imports for 2026, which will be allocated entirely to Argentina. The additional beef will be distributed in four quarterly tranches of 20,000 metric tons each, beginning Feb. 13, 2026, and continuing through the end of the year.

Record Beef Prices Drive Action

U.S. consumers have seen beef prices climb steadily in recent years, with ground beef reaching an average price of $6.69 per pound in December 2025, which was the highest level recorded since the 1980s. Despite higher prices and the availability of alternative proteins, demand for beef remains strong, prompting record beef imports of 4.64 billion pounds in 2024, a 24% increase over the previous year.

But this is not the first time President Trump has proposed measures to address rising beef costs. In October 2025, he told reporters at the White House, “We are working on beef, and I think we have a deal on beef. The price of beef is higher than we want it, and that’s going to be coming down pretty soon too. We did something,” without elaborating.

The National Cattlemen’s Beef Association (NCBA) responded at the time with a strong warning, criticizing the President’s approach. NCBA CEO Colin Woodall says. the plan risked “damaging the livelihoods of American cattlemen and women, while doing little to impact the price consumers are paying at the grocery store.”

He emphasizes concerns about trade imbalances, the risk of introducing foreign animal diseases from Argentina, and the importance of focusing on domestic solutions such as New World screwworm facilities, regulatory reforms, and disease prevention programs.

The Trump administration, however, argues the current import expansion is a necessary response to natural disasters and market disruptions that have reduced domestic beef supply. The administration will continue monitoring supply and demand, with the Secretary of Agriculture advising on any additional measures that may be necessary to ensure stable beef prices for American families.

This proclamation highlights ongoing challenges facing U.S. cattle producers, including climate-related disruptions, disease risks, and supply chain pressures, while signaling the administration’s willingness to leverage international trade to stabilize consumer costs.

Are Beef Prices Too High? Consumer Demand Signals No

Since the president’s initial comments in October, there’s been a debate about if beef prices are too high. Oklahoma State extension livestock specialist Derrell Peel agrees consumer behavior continues to support higher prices, even if there is talk about bringing beef prices down.

“I don’t think we have a demand problem or a beef price problem. Consumers are still paying,” Close says. “If consumers didn’t want to pay high prices for beef, they don’t have to. There’s places they can go. They’re still paying it.”

High prices have raised concerns about whether consumers will eventually push back, but Terrain’s Don Close says demand data continues to defy that narrative.

“Over the last two years at Terrain, we’ve spent more time trying to evaluate and study what we can about demand,” he says. “We’ve known what the supply is.”

By examining beef prices relative to income, inflation and competing proteins, Close said the results remain consistent.

“We’re looking at all-fresh beef prices against the consumer price index. We’re looking all fresh against average hourly wage. We’re now looking at beef in relationship to both pork and broilers,” he says. “And all those matrices that we’re looking at, we’re not seeing and have not yet seen any softening in beef demand. It’s still in place.”

Economists Weigh In: Can Beef Prices Be Lowered Without Harming Producers?

In October, Trump’s initial comments tanked the cattle market. To better understand whether retail beef prices can be reduced without affecting cattle markets, Farm Journal spoke with two economists and livestock market experts. When asked if there’s a way to lower beef prices without impacting cattle futures, both economists say the short answer is, “no.”

“Simple answer is no,” says Close. “I would add to that that when we look at beef prices in relationship to the other proteins, I would absolutely say that pork and broilers have been a beneficiary of the record high beef prices. No doubt. But they are not yet to a point that they are a detriment to beef prices; beef is still gaining market share relative to other proteins.”

David Anderson, extension livestock economist at Texas A&M, echoed that perspective. “I think it’s a great, interesting question, but from the ranch to wholesale beef to retail beef, these prices are all related,” Anderson says. “If it was possible to do something that actually brought down retail prices to consumers, it’s going to have an effect upstream, downstream, however you want to call that. But even then, I’m not sure there’s much you can do to bring down retail prices. We’ve got a product that’s in demand. Even though we look at our nominal retail beef prices that are record high, I think that for consumers, beef delivers value for the money and they’re going to keep buying. That and tighter supplies is a recipe for higher prices. People continue to buy. There’s a bunch of big trends there, heck, let’s eat more protein, you know, and that helps the whole meat complex: beef, dairy, eggs, beans, you name it. So while this supports cattle prices, it also means there’s not a whole lot you can do to bring down beef prices significantly.”

New U.S.-Argentina Trade Deal Sets Stage For President Trump’s Latest Proclamation

The move this week follows a new trade and investment agreement between the United States and Argentina, signed earlier this week by USTR Jamieson Greer and Argentina’s Foreign Minister Pablo Quirno. The agreement provides preferential market access for U.S. goods, eliminates or reduces tariffs on a wide range of products, and enhances cooperation on economic and national security issues.

On agriculture, Argentina has agreed to open its market to U.S. poultry and poultry products within a year and simplify export regulations for U.S. beef and pork. The agreement also requires Argentina to accept U.S. food safety and regulatory standards for meat and poultry, while prohibiting restrictions on U.S. use of certain cheese names, such as asiago, feta, or camembert.

USTR officials said the deal will also enhance cooperation on export controls for sensitive items, protect telecommunications infrastructure, and prevent digital trade barriers that could affect U.S. tech companies. Although China is not mentioned in the text, the agreement is designed to strengthen U.S.-Argentina coordination in addressing unfair trade practices from third countries.

What’s Ahead?

The Trump administration will continue monitoring domestic beef supply and demand, with the Secretary of Agriculture advising on any additional measures necessary to maintain affordable prices for American consumers. While some in the cattle industry remain cautious about importing Argentinian beef, the administration frames the decision as a short-term solution to natural disasters and market disruptions that have tightened domestic beef availability.

'Everything’s a Game of 3D Chess': The Real Reason Behind U.S. Ties to Argentina

Fri, 24 Oct 2025 19:32:25 GMT

The U.S. is tightening ties with Argentina, and that’s raising eyebrows across farm country.

From a $20 billion bailout to plans to import Argentine beef, farmers and ranchers say the growing alliance feels like it’s coming at the expense of U.S. agriculture.

But according to Arlan Suderman, chief commodities economist with StoneX, there’s more to this story, and it has everything to do with China .

A Geopolitical Chess Match

“Everything’s a game of 3D chess,” Suderman explains. “At the center of it is China.”

For years, China has been strengthening ties with Argentina, investing heavily in infrastructure and agriculture to secure long-term supply lines and influence. Suderman says the U.S. sees an opportunity to pull Argentina away from Beijing’s orbit, using economic incentives to win its allegiance.

“The White House sees this as a way to create a split between Argentina and China,” Suderman says. “It’s not just about soybeans or beef. It’s about global positioning.”

The Beef Backlash

But for cattle producers, that strategy feels like betrayal. President Donald Trump’s recent talk of importing Argentine beef sparked anger across rural America. Many worry increasing imports will undercut domestic markets.

Suderman urges producers to stay calm. He points out the announced beef imports, around 80,000 metric tons, are only equal to about two day’s worth of U.S. beef production.

“It’s not enough to impact prices,” he says, “but it does show a disconnect between Washington and agriculture.”

He adds that advisers to the president might have misunderstood how ag markets work.

“These aren’t controlled industries like pharmaceuticals,” Suderman notes. “Ag markets are driven by supply and demand, and right now, we have record demand with tight supply.”

Soybean Farmers Feel Left Behind

While beef producers protest, soybean farmers are already bruised. Argentina’s temporary suspension of export taxes earlier in the year allowed them to undercut U.S. prices and quickly sell beans to China — a major blow to American growers. Suderman says it’s a reminder that the U.S. is no longer the world’s low-cost soybean producer.

“Argentina and Brazil have a cheaper currency and lower costs,” he explains. “And China has been investing there for decades.”

Suderman says he’s been warning the industry for years that the U.S. would eventually lose China as its top soybean buyer.

“This didn’t happen overnight,” Suderman says. “China has been building toward this for 20 years. The current administration may have sped it up, but it was coming.”

Beijing’s refusal to buy American and its pivot to Brazil could be less about economics and more to do with politics. “It’s a calculated decision about control and national leverage, not about getting the cheapest beans,” says one ag economist. Read more here.

Caught in a Bigger Battle

Beyond agriculture, Suderman says the real fight isn’t over soybeans — it’s over rare earth minerals. China currently controls about 90% of the world’s processed rare earths, which are essential to making electronics and advanced defense systems.

“That’s the real leverage,” he says. “Soybeans are small compared to the rare earth battle.”

The Trump administration is now trying to expand domestic rare earth supply chains, sourcing from Australia, Greenland and even within the U.S. But Suderman says it could take two to three years before those efforts meet national defense and economic needs.

What Farmers Need to Know

To many farmers, Washington’s global strategy feels like it’s coming at their expense. While the administration is playing the long game with China, rural America is paying the short-term price. Still, Suderman sees opportunity ahead if the U.S. can continue developing new markets, strengthen biofuel demand and tap into growing trade opportunities in Africa and beyond.

“We weren’t ready to give up China,” he admits, “but we need to look forward not backward.”

Latin America’s Dairy Exports Likely to Remain in the Region...for Now

Wed, 27 Nov 2024 20:40:13 GMT

The current milk production situation across Latin America is starkly different than what it was at the beginning of this year. In some countries, healthy margins are boosting output, whereas adverse weather has limited output in others, according to Monica Ganley, analyst with the Daily Dairy Report and principal of Quarterra, an agricultural consulting firm in Buenos Aries.

Of the Latin American milk-producing countries, Mexico is the most crucial to the U.S. dairy industry, and like elsewhere across the region, a shift in output has also started to occur in the United States’ largest dairy market.

“Official government data indicates that Mexico’s milk production continues to move steadily higher, including a 3.1% year-over-year increase in October, but that is in sharp contrast to information being shared by market participants,” Ganley said. “Stakeholders indicate that milk volumes in Mexico have tightened considerably compared to earlier in the year.”

In fact, weakening production in Mexico has pushed milk prices higher, which helps to explain why Mexico’s dairy imports have remained so strong in recent months even as the value of the peso has declined, she said. While a decline in milk and dairy product supplies in Mexico should be good for the U.S. dairy industry, the election of former President Donald Trump as the 47th president of the United States has raised concerns for the U.S. dairy industry.

Trump has threatened to pressure Mexico into curbing illegal immigration into the United States, a crucial issue during the campaign, by levying 25% tariffs on Mexican imports into the United States. And if the border issue persists, he has further threatened to increase those tariffs to 100%.

If Trump follows through on his threat of tariffs, Mexico has already indicated it would retaliate with tariffs of its own. A recent New York Times article noted that about 80% of Mexico’s exports are sent to the United States, while 16% of all U.S. exports go to Mexico. However, Ganley noted that Mexico is a particularly critical market for the U.S. dairy industry, with nearly 30% of all U.S. dairy exports in value terms sent to Mexico last year.

Another large importer of dairy products, Brazil, started the year with strong milk production, but that has since stumbled due to major weather challenges. Ganley noted that lingering effects of flooding in the south of the country compounded by drought and wildfires in the center of Brazil have had a negative impact on milk production. By the third quarter of this year, she said, year-over-year milk production had slipped 0.6%.

“Weaker domestic production in Brazil has kept demand for dairy product imports strong,” Ganley noted. “But most of that demand will be filled by fellow Mercosur members, Argentina and Uruguay.”

South American Milk Production

(Daily Dairy Report)

At the same time, milk production in Latin America’s who largest dairy-exporting countries has shifted from double-digit losses early in the year to being down only slightly in recent months. “At the start of 2024, a difficult macroeconomic environment in Argentina, punctuated by soaring inflation, caused dairy producers to slash production as they attempted to insulate themselves from rising costs. The resulting scarcity of milk combined with moderate operating costs, have driven profits higher, and the resulting strong margins have encouraged dairy producers to expand.”

In Uruguay, the region’s other major exporter, heavy rains took a toll on second-quarter output, but just like in Argentina, strengthening milk prices in the face of lower output have improved producer profitability, Ganley reported, and that has led to a near recovery in output. Most industry analysts expect production in Uruguay to continue to improve.

“However, even if milk production continues to improve among the region’s exporters, milk and dairy products would largely stay confined to the region if demand among Latin America’s importers continues to increase,” Ganley said.

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South American Dairy Exporters Hit Headwind in 2024

Wed, 23 Oct 2024 19:26:19 GMT

Adverse weather and economic instability have challenged South America’s key dairy exporting countries this year, while weak supplies have driven milk prices higher, and that has led to improved profitability. As milk prices rise, milk production could follow in the fourth quarter of 2024 leading to more product on the international market, said Monica Ganley, analyst with the Daily Dairy Report and principal of Quarterra, an agricultural consulting firm in Buenos Aries.

“In Argentina, an aggressive economic agenda implemented by the new president late last year resulted in a major currency devaluation and soaring inflation for the country,” Ganley said. “The instability ignited by these reforms drove producers there to reduce their costs by drying cows off early and reformulating feed rations away from expensive concentrates.”

As a result of these challenges, year-over-year milk production tumbled by 13% in the first half of the year. As milk supplies fell and milk prices rose, producer margins soared to multi-year highs, she added. High margins encouraged producers to increase output, narrowing the production gap with prior-year production. The year-over-year deficit slipped to just 4.8% in July and 6.2% in August.

In the first quarter of 2024, Uruguay posted a 2.2% increase in output, but as excessive rains led to flooding in key dairy areas, that growth was undone in the second quarter, Ganley noted. Torrential rains and flooding negatively impacted pasture conditions, cow comfort, and animal health, which ultimately caused a cumulative 10.6% drop in production in the second quarter.

Similar to what occurred in Argentina, falling supplies in Uruguay spurred increases in milk prices in the Southern Hemisphere’s winter. Even though milk prices failed to exceed prior-year levels, when combined with moderate operating costs, the increase in milk prices was sufficient to deliver stronger producer margins, Ganley said. Uruguayan producers responded and the large year-over-year gap in milk production begun to shrink, with volumes down 9.2% in July and 5.3% in August, compared to the same months in 2023.

“South America will remain a key component of the global dairy supply matrix as a growing global population requires more dairy,” Ganley noted. “But to substantively contribute to global dairy demand, it will be critical that the region’s exporters see milk production improve.”

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World Milk Production Begins New Year Weak

Tue, 02 Jan 2024 17:43:12 GMT

Declining world milk supplies have tightened global dairy markets and contributed to some recent price gains, such as the recent rise in the Global Dairy Trade index. According to Monica Ganley, analyst with the Daily Dairy Report and principal of Quarterra, an agricultural consulting firm in Buenos Aries, “Milk production has been slipping across the world’s main dairy-exporting regions and countries as margin pressures, weather challenges, and regulatory burdens weigh on volumes.”

In October, combined output across the world’s top-five dairy exporters fell 1.2% below year-earlier levels, marking the third consecutive month of contraction and the deepest year-over-year loss since May 2022. The most severe absolute losses occurred in Europe, Ganley said. In the European Union and United Kingdom combined, milk production tumbled 1.7% in October, a drop of 224,000 metric tons (MT).

“The reduction in the EU and UK milk supply represented 70% of the total decline seen across all the key exporters. Industry stakeholders suggest that falling milk prices this past autumn undermined profitability, and as expectations intensified for an increasingly restrictive regulatory environment in Europe, many producers chose to exit the business permanently,” Ganley said.

Losses were also seen across the Atlantic. For example, in the United States, thin margins and a declining milk herd pushed year-over-year production down 0.7% or 61,000 MT. Milk output slipped another 0.6% in November, compared to the prior year, marking the fifth straight month of year-over-year declines in the United States. In November, the U.S. milk-cow herd shrunk to a three- year low, setting the stage for sustained contraction in U.S. milk output.

Meanwhile, in Argentina, where a new government has created an economic shock, output fell 4.3%, or 49,000 MT. Argentina’s new president, Javier Milei, has promised to restore the country’s ailing economy by slashing government spending and implementing sweeping reforms. Many of the proposed reforms have profound implications for the agricultural and dairy sectors, Ganley reported. In the first week following his inauguration, Milei announced a more than 50% devaluation of the official exchange rate, which will have multiple impacts for the dairy industry, she said.

“For exporters, it will increase the amount of money that hits their bank accounts, since exports are paid at the official rate. However, it will also make dollar-denominated inputs more expensive for the sector in peso terms,” she said. “Another key initiative is the implementation of a 15% export tax across nearly all products. However, Argentina’s dairy sector was successful in securing an exemption from this rule. As a result, Argentina’s dairy exports will become more competitive in international markets as export taxes will be 0% as opposed to the 4.5% to 9% levied in recent years.”

In Oceania, New Zealand production dipped a modest 0.3% in October, while in Australia, the only key exporter to see volumes rise, output rose 2.1% vs. the same month last year, adding about 19,000 MT of milk to the global total.

“Looking forward, the situation remains precarious,” Ganley said. “Even though most of the factors that have been pressuring milk production lower are likely to persist, global demand remains weak, suggesting that further milk production losses could be necessary before milk and dairy product prices are able to move much higher.”

For more on milk prices, read:

France Edges Out Argentina in Dairy

Tue, 20 Dec 2022 17:19:43 GMT

This past Sunday, soccer fans around the world were glued to their computers, televisions, and radios for the final match of the 22nd FIFA World Cup. In a penalty shootout, Argentina overtook France in one of the most thrilling finals in World Cup history. While France has carried the trophy home twice before, in 1998 and 2018, Argentina has now claimed the title three times in 1978, 1986, and 2022. When it comes to dairy, the two soccer powerhouses, while not quite as evenly matched, are both still global dynamos.

“Both countries boast strong dairy traditions and share their dairy products with the world,” said Monica Ganley, analyst with the Daily Dairy Report and principal of Quarterra, an agricultural consulting firm in Buenos Aires.

Last year, according to data from Argentina’s Ministry of Agriculture and Dairy Market Observatory, Argentina’s1.577 million dairy cows produced an estimated 26.3 billion pounds of milk. Over the past 10 years, the country’s milk production increased at an average annual rate of 1.2% due mostly to productivity improvements, Ganley noted. Per cow productivity increased 20.9% from 2011 to 16,649 lbs. in 2021. But that’s still 30.5% less milk than the average cow produces in the United States, she added.

“Most of Argentina’s dairy producers capitalize on the country’s vast pastureland and domestic grain production to employ a mixed system of both extensive and intensive practices that allows them to enjoy a moderate cost structure,” Ganley said. “Argentina enjoys rich natural resource wealth, and while this should be a boon for dairy industry growth, political mismanagement and a tumultuous economy have stymied expansion.”

Argentina manufactures its milk supply into a variety of products, with more than 43% of the milk going into cheese and another third dried into milk powder, particularly whole milk powder, much of it exported.

“The remainder of Argentina’s milk supply is destined for fluid milk, fresh products, and the country’s hallmark dulce de leche, a rich caramel product mostly used in desserts,” Ganley said. “In milk equivalent terms, per capita consumption in Argentina is about 420 lbs., although it has fallen in recent years due to economic challenges.”

Across the Atlantic, France’s dairy industry is more than twice as big as Argentina’s, with roughly 3.6 million cows that produce nearly 55 billion pounds of milk. France, Europe’s second-largest milk producer, accounts for about 17% of the milk produced in the European Union, the world’s largest exporter of dairy products

“However, like many Western European producers, French producers have been feeling the pressure of intensifying labor and environmental challenges and milk production has suffered,” Ganley said. Over the last decade, France’s milk production has fallen at an average annual rate of 0.2%, according to Eurostat.

“About one third of France’s milk is processed into cheeses including iconic French varieties like Brie, Camembert, and Roquefort, names that the French have aggressively tried to protect through geographic indicator language. Another fifth is processed into butter and milkfat products,” she said. “Dairy products form a cornerstone of the French diet, with average per capita consumption of 530 lbs. per year—less than U.S. per capita consumption—including 27 lbs. of cheese. Yet despite this substantial domestic consumption, 40% of French milk supplies still move offshore.”

When it comes to dairy, France may have the edge on Argentina, but when it comes to soccer, Argentina has proven that it has the edge on France.

South American Exporters Having Trouble Moving Product to Russia

Tue, 19 Apr 2022 15:00:00 GMT

The unprecedented economic sanctions that have been levied against Russia for its invasion of Ukraine have started to disrupt South American dairy shipments to Russia. And it is unclear at this point, whether Belarus, Russia’s primary dairy supplier, will be able to fill the gap left by South American exporters who still want to trade with the country.

Russia is an important destination for South American dairy exports, and the trading relationship strengthened beginning in 2014 when Russia annexed Crimea and the United States, Europe, and others applied sanctions to Russia, according to Monica Ganley, analyst with the Daily Dairy Report and principal of Quarterra, an agricultural consulting firm in Buenos Aries.

The 2014 sanctions spurred Russia to ban imports of some products, including U.S. and EU dairy products, but did not apply to South America. Last year, Russia accounted for 11% and 7% of Argentina’s and Uruguay’s dairy exports in value terms, respectively, Ganley said, and Russia is a key destination for cheese, butter, and anhydrous milkfat exports from South America.

“The more stringent economic sanctions levied against Russia in recent weeks, however, have disrupted the flow of products from South America,” Ganley said. “Limitations on financial tools including access to the SWIFT banking system has left Russian buyers unable to pay for imported goods. The ruble’s deterioration has also rendered imported product relatively more expensive for Russia.”

In early April, some dairy exporters in Argentina and Uruguay reportedly had product en route to Russia. However, because of the issues resulting from Western sanctions, these exporters said they would delay future shipments until the current problems can be resolved, Ganley said. Thus, today’s battered supply chain, along with Western sanctions on Russia, will continue to disrupt the flow of dairy trade.

“With the loss of the Russian market, South American dairy exporters will search for alternative destinations,” she said. “While some of these exporters have already had success rehoming products in China, sellers will be keen to develop additional channels for distributing cheese and milkfat products that otherwise would have been bound for Russia.”

Whether Russia will be able to obtain the dairy products it needs is also in question. Since Russia implemented a ban on dairy imports from Western nations in 2015, ally Belarus, a country that has sent troops to aid Russia in its attack on Ukraine, has been supplying much of Russia’s dairy needs. But following last year’s drought, a shortage of soybean and other protein meals has developed in Belarus, and deliveries from neighboring Ukraine have been stopped.

Today’s geopolitical situation and the ongoing disruption in the flow of dairy products could put downward pressure on prices, but that would only slow the upward price trajectory, supported by concerns that global demand will continue to outpace supply, Ganley said.

First Thing Today: South American Growing Season Off to a Slow Start Amid Adverse Weather

Thu, 12 Nov 2020 04:42:17 GMT

Good morning!

Futures favoring the upside after a choppy overnight session... Corn futures saw two-sided trade overnight and as of 6:30 a.m. CT the market is around a penny higher. Soybeans are narrowly mixed after holding to a narrow, choppy range overnight. Winter wheat futures are 2 to 3 cents higher, while spring wheat is again mixed. The U.S. dollar index is under light pressure, while crude oil futures are posting slight gains.

PF CCI: Corn and bean ratings fall... When USDA’s crop ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale, with 500 being perfect), the corn crop the corn crop fell 1.61 points to 357.01 points. Soybean ratings fell 2.24 points over the past week to 346.67 points. Get details here .

Cordonnier leaves crop pegs unchanged... Crop Consultant Dr. Michael Cordonnier made no change to his U.S. corn or soybean yield estimates which stand at 166 bu. per acre and 48 bu. per acre, respectively. He said late-summer heat is helping the corn crop, though maturity still lags. But he adds dryness is a concern for the central Corn Belt for both crops. Soybean development is running pretty lose to normal, so he says further rains will have limited benefit. He has a neutral bias going forward toward both corn and soybeans.

Hot and dry weather delays soybean planting in Brazil... While the soybean-free period has passed in Brazil, Cordonnier reports planting efforts are on hold across central Brazil as temperatures have been in the upper 90s to low 100s and there has been virtually no rain over the past month. Farmers in this region typically like to wait until they receive between 2 and 3 inches of rainfall to insure germination and emergence, he explains. Conditions have also been warm and dry in southern Brazil, and what few fields have been planted there are having germination problems. In his first forecast for 2017-18, Cordonnier estimates soybean acreage will climb 2.5%, but a return to normal yields will result in a 4.3% reduction in crop size to 109 MMT. He expects the Brazilian corn crop to fall both in terms of yields and acreage, resulting in an 88.0 MMT crop for 2017-18, down 10% from the year prior.

Wet weather raising some acreage concerns in Argentina... In stark contrast, Cordonnier reports that wet weather in Buenos Aires and La Pampa has raised concerns that these areas may not dry out in time for normal spring planting, especially for corn. Cordonnier took an initial stab at the Argentine 2017-18 crop size, cautioning that these are just “educated guesses at this point” that will likely change. He pegged the Argentine soybean crop at 55.0 MMT, down 4.8% from year-ago, with the corn crop expected to total 42.0 MMT, up 2.4% from 2016-17.

Stretch of Illinois River closed due to low water. A one-mile stretch of the Illinois River near the La Grange Lock and Dam has been closed after three vessels became grounded in the area due to low water, according to the U.S. Army Corps of Engineers. The area could be closed for several days as a dredging vessel is not expected to arrive until late Wednesday or early Thursday, according to Corps spokeswoman Sue Casseau. There were six downriver-bound and four upriver-bound vessels waiting to pass as of Monday afternoon.

Trump to focus on sovereignty and accountability at his first U.N address... President Donald Trump is expected to stress “sovereignty and accountability” rather than joint action on global crises in his address to the United Nations General Assembly this morning. He is also expected to focus on the Iran nuclear deal and the nuclear standoff with North Korea. In brief remarks on Monday, Trump said the U.N. had grown too bureaucratic and ineffective and should overhaul itself, but gave no clue as to whether he would cut U.S. funding. Trump called for management and budget reform of the U.N., as well as greater burden sharing among its members for peacekeeping duties.

Slow Chinese corn sales could lead to a supply crunch... Concerns about a short-term supply shortage in China have sparked an aseasonal rally in its corn market, as farmers there are changing their marketing patterns due to the elimination of its price support program for the grain. Previously, farmers would sell their corn crop at a minimum price to the government who stockpiled the grain. But now they are paying more attention to price fluctuations and those with storage options are opting to delays sales as they feel prices will be better later. Concerns about a tight supply are heightened by drought early in the season that delayed planting for some areas.

Lighthizer: China an unprecedented threat to trading system... China’s economic model represents an “unprecedented” threat to the world trading system that can’t be addressed under current global rules, U.S. Trade Representative (USTR) Robert Lighthizer said Monday in a speech in Washington. “There is one challenge on the current scene that is substantially more difficult than those faced in the past, and that is China,” he continued. “The sheer scale of their coordinated effort to develop their economy, to subsidize, to create national champions, to force technology transfers and to distort markets in China and throughout the world is a threat to the world trading system that is unprecedented.” The World Trade Organization (WTO) and the rules that underlie the international trade arbitrator weren’t designed to deal with China’s current approach to its economy, he said.

NAFTA talks moving at ‘warp speed’... Regarding NAFTA 2.0 talks with Canada and Mexico, whose third meeting to revise the deal will take place from Sept. 23-27 in Ottawa, Lighthizer has said the U.S. is seeking a major overhaul of the deal that will benefit American workers. “We’re moving at warp speed, but we don’t know if we’ll get to a conclusion,” Lighthizer said. He declined to answer questions about the United States’ proposal to add a “sunset” provision to a revised NAFTA deal, which would require the agreement to be terminated after five years unless all three countries agree to continue.

EU to cut import tariffs on Argentine biodiesel tomorrow... The European Union will lower its import duties on biodiesel from Argentina from a range of 22.0% to 25.7% to 4.5% to 8.1% on Wednesday, the bloc confirmed. This comes after the World Trade Organization ruled against the duties. Prior to the tariff hike in 2013, the EU had been Argentina’s top customer, and its return as a buyer is especially timely since the U.S. recently hiked tariffs on the Argentine biofuel.

Friendly cash signals... Early cash signals are promising for another week of gains for the cash cattle market as showlist are down a net 18,000 head, packers continue to enjoy strong profit margins and the boxed beef market posted solid gains to start the week, though movement was fairly light. But negotiations have extended late into the week of late, which could lead to more choppy futures price action, especially since they are already trading at a premium to last week’s average cash price of $105.97.

Cash hog market concerns linger... Some lean hog contracts faced profit-taking to start the week, as traders were unable to sustain early gains above near-term levels of resistance. Plus traders remain concerned that the ongoing slide in the cash hog market limits upside potential for futures. Cash hog bids softened to start the week.

Overnight demand news... South Korea purchased around 69,000 MT of corn to be sourced from optional origins. Japan tendered to buy 127,427 MT of food-quality wheat from the U.S., Canada and Australia in its regular tender. Egypt tendered to buy an unspecified amount of wheat from global suppliers. Jordan made no purchase in its tender to buy 100,000 MT of feed barley.

Today’s reports:

10:00 a.m., Weekly Export Inspections -- AMS
11:00 a.m., Livestock, Dairy, & Poultry Outlook: September 2017 -- ERS
3:00 p.m., Crop Progress -- NASS

First Thing Today: Dicamba-impacted Soybean Acres Estimated at 3.1 Million

Thu, 12 Nov 2020 04:42:10 GMT

Good morning!

Some corrective gains overnight... Corn futures are fractionally higher after sticking to around a two-cent trading range overnight. Soybean futures also saw quiet, two-sided trade overnight, and as of 6:30 a.m. CT most contracts are up a penny or two. Spring wheat futures have soared 15 to 17 cents. Winter wheat is up 3 to 5 cents. The U.S. dollar index is slightly higher this morning, as are crude oil futures.

Warm, wet forecast for Scouts on Farm Journal Midwest Crop Tour... The National Weather Service forecast for Aug. 21-25 calls for heat across the Midwest and Plains, with the highest temps expected for the eastern Corn Belt. But wet weather across the Midwest over this period should help blunt the impact of the high temperatures. Texas and Oklahoma are expected to be dry the third week of August.

Dicamba-impacted soybean acres estimated at 3.1 million... The number of soybean acres impacted by Dicamba across the U.S. continues to increase and is now pegged at 3.1 million as of Aug. 10, according to surveys of agricultural extension agents conducted by Kevin Bradley, an associate professor in the University of Missouri’s Division of Plant Sciences. Official dicamba-related cases currently being investigated by departments of agriculture in 17 states across the south and Midwest have also risen, from 1,411 to 2,242, Bradley reports.

Another year of record-large Argentine corn acres expected... Argentina’s corn acreage will likely climb between 5% and 10% in 2017-18 to more than 5 million hectares, according to analysts cited by Reuters. This would be the second year in a row of record-high corn plantings. Corn acreage has climbed in the country since the election of President Mauricio Macri and the subsequent relaxing of export restrictions. Plus margins are more attractive for corn and recent ample rainfall is favorable for planting the grain, the analysts explain. Corn also has an advantage over wheat in that it has a longer planting season.

NAFTA 2.0 talks begin today and last through Sunday... While U.S. officials are holding back on committing to a set number of negotiations, Canadian sources have signaled there will be seven rounds. Today’s session in Washington will begin with three speeches — one from each of the country’s principal negotiators: U.S. Trade Representative Robert Lighthizer, Canadian Foreign Minister Chrystia Freeland, and Mexican Economy Secretary Ildefonso Guajardo. Negotiating texts will not be released to the public because they are “classified” documents, the USTR official said.

Major farm groups to issue joint statement today on NAFTA 2.0... American Farm Bureau Federation, the Canadian Federation of Agriculture (CFA) and Mexico’s Consejo Nacional Agropecuario will issue a joint statement today in support of NAFTA. That could be a signal the groups do not want their country’s trade policy negotiators to use agriculture as leverage to garner other priorities. Meanwhile, USDA Secretary Sonny Perdue, CFA President Ron Bonnett and Bosco de la Vega of Consejo Nacional Agropecuario will each speak during an event today at the National Press Club in Washington.

FOMC minutes released today will be closely watched for any clues... Investors looking for clues as to when the Federal Reserve will start unwinding its $4.5-trillion balance sheet will turn to the minutes of the July Federal Open Market Committee (FOMC) meeting this afternoon. The minutes may also give guidance as to how many policy makers agree with Federal Reserve Bank of New York President William Dudley that another rate rise may be needed before the end of the year.

Ukraine’s wheat harvest winding down... With Ukraine’s wheat harvest nearing completion (estimated to be 98% done), the country has brought in 26 MMT of the grain with an average yield of 4.16 MT per hectare. Last week, USDA estimated Ukraine’s 2016-17 wheat crop at 26.80 MMT, which would be down slightly from the year prior.

DOJ settles Clean Water Act/WOTUS suit against farmer... A $1.1-million settlement in the case involving California farmer John Duarte was announced Tuesday by the U.S. Department of Justice (DOJ), just as the matter was about to go to trial. Under the settlement, Duarte and Duarte Nursery Inc. agreed to pay $330,000 in civil penalties and fund $770,000 in restoration work on properties other than his own as compensation for damage to 22 acres of protected streams and wetlands on his property. Duarte will be able to put most of the site back to agricultural use and he is to seek future determinations on whether streams and wetlands on the property were subject to federal protections. A judge previously ruled that Duarte broke the law and the trial was scheduled to begin Tuesday was to establish penalties. The government had been seeking $2.8 million in fines and millions of dollars in mitigation expenses.

Quintenz sworn in as CFTC Commissioner... Brian Quintenz was officially sworn in as a member of the Commodity Futures Trading Commission (CFTC) on Tuesday. “I’m deeply honored to be sworn in as a Commissioner of the CFTC,” Quintenz said. “I have tremendous respect for this agency and the people who work here. I look forward to working to fulfill the agency’s mission to foster open, transparent, competitive, and financially sound markets.”

Cattle could be working on a low... Strong gains in the cattle complex yesterday led to talk the markets may be working on near-term lows. Recent support has largely stemmed from futures’ discount to last week’s cash trade. Higher showlists and choppy beef prices signal cash prices will likely slip this week. So far, there has just been some very light action at $110 in Iowa, which is in line with where the August contract settled on Tuesday.

Hogs rally, but in or near overbought territory... Pork movement picked up to 391.75 loads yesterday on a modest, 11-cent price dip. This eased concerns about recent sluggish movement and helped futures to post a strong rally yesterday. The momentum of the market favors bulls, but several contracts climbed into overbought territory on Tuesday according to the nine-day Relative Strength Index.

Overnight demand news... Egypt tendered to buy an unspecified amount of wheat from global suppliers. Tunisia tendered to buy 92,000 MT of soft wheat and 50,000 MT of animal feed barley from optional origins.

Today’s reports:

9:30 a.m., Weekly Ethanol Production -- EIA
11:00 a.m., Livestock, Dairy, & Poultry Outlook: August 2017 -- ERS
1:00 p.m., FOMC Minutes -- Federal Reserve
2:00 p.m., Broiler Hatchery -- NASS

First Thing Today: Impact of Trump's Cuba Policy Changes

Thu, 12 Nov 2020 04:42:03 GMT

Followthrough buying in soybeans and wheat overnight... Corn futures are fractionally lower after favoring the downside overnight. Soybeans enjoyed gains overnight and as of 6:30 a.m. CT most contracts are 2 to 3 cents higher. Winter wheat futures are up 4 to 6 cents on followthrough buying after yesterday’s bullish reversal for the SRW wheat market. Spring wheat futures are 4 to 7 cents higher. The U.S. dollar index is slightly lower, while crude oil futures are firmer.

Trump to scale back trade opening with Cuba... President Donald Trump will issue a policy directive today aimed at scaling back some of the changes made by former President Barack Obama to U.S./Cuba policy, taking aim at tourist travel and transactions with Cuba’s military but leaving in several of Obama’s steps toward normalization. Trump will direct the Treasury and Commerce departments to prohibit direct financial transactions with Cuba’s military and intelligence services. The directive will allow exceptions for airlines and cruise lines and will aim to not disrupt business under way. Much rests on how final regulations are crafted; the announcement will trigger a 30-day process for Treasury and Commerce to begin drafting new regulations, and the changes won’t go into effect until that process is completed. The countries’ embassies will remain open. Individual travel will remain legal through more than 10 categories, including research and humanitarian work and family visits.

Impact of Trump’s Cuba policy changes... Trump had promised on the campaign trail to roll back Obama’s policy changes on Cuba, and officials say his announcements are aimed at following through on that. White House officials signaled that Trump will retain portions of the policy shift that has won the endorsement of those in agricultural states that want to expand trade with Cuba. While they say the coming changes should not impact U.S. farm product sales to Cuba, the new restrictions will bar U.S. companies from doing business with companies affiliated with the Cuban military. That would make future U.S. ag export sales more difficult.” Why? U.S. food and ag cargoes are unloaded at Mariel, about 25 miles west of Havana. The Cuban military runs the port, so a prohibition on dealing with military-related companies would shut off use of the port.

Strike disrupts shipments at Argentine port... Members of the CGT San Lorenzo Port workers union launched an open-ended strike on Wednesday, causing more than 20 grain cargo ships to drop anchor along Argentina’s Parana River yesterday. Strikes are common in South America, and they are typically short-lived.

Better demand at Chinese corn auction... China sold 1.254 MMT of corn from its state reserves today, which represents 58.5% of the grain offered. The bulk of the business was for 2013-crop corn, which sold at an average price of 1,366 yuan ($200.48) per metric ton. This was much improved from yesterday’s light sales.

Competitive Black Sea prices should blunt impact of smaller wheat crop on exports... Analysts polled by Reuters expect the Black Sea countries of Russia, Ukraine and Kazakstan to produce 105.8 MMT of wheat in 2017, which would be a decline of 7.5% from year-ago. This is expected to result in a 3.3% drop in exports to 50.4 MMT in 2017-18. Russia will likely ship a record 28.8 MMT of wheat in 2017-18, up 4.7% from year-ago, as competitive prices and high stockpiles should make up for a smaller crop size. Ukraine is expected to ship 14.6 MMT of wheat, which would be down 3.2 MMT from USDA’s forecast for the current marketing year. Kazakhstan is likely to export 7.0 MMT of wheat, according to the survey, up 2.9% from year-ago.

French crop condition ratings slide... FranceAgriMer now rates 74% of the soft wheat crop in good to excellent condition, a one-point drop from week-ago. It also lowered the amount of top-rated winter and spring barley to 65% and 73%, respectively. Sixty-two percent of the durum wheat crop is now rated good to excellent, down two points from week-ago. The French farm office rates 86% of its corn crop in top shape, down a point from last week. Hot, dry conditions have taken a toll on crops in this major producing region.

Dow-DuPont garners U.S. antitrust approval to create new firm... Dow Chemical Co. and DuPont Co. won U.S. antitrust approval for their $73-billion merger. The companies said the assets they agreed to sell to win U.S. approval didn’t go beyond what they had already agreed to with other jurisdictions. DuPont will sell off some of its herbicide and insecticide products and Dow will unload a plastics packaging unit, according to a settlement filed Thursday in federal court in Washington. The new company will be called DowDuPont Inc. They are expected to close the deal in August. The plan is to split the merged company into three within 18 months of closing, with the first spinoff a materials/science company that will retain the Dow name. The other two post-split companies will focus on ag and specialty products.

More cash cattle trade at softer prices... Some additional cash cattle trade took place in Nebraska at $124 to $125 and in the Iowa/Minnesota market at $126, which is down from trade earlier in the week that mostly ranged from $130 to $134. This signals recent declines in futures prices upped feedlots’ bargaining power. Futures are still below even this latest drop in the cash market.

Slaughter moderates as margins dwindle... Packer profit margins have slipped into the upper teens this week, as gains in the cash market have outpaced those of the product market. This week’s kill has also slowed from last week’s aggressive pace, though slaughter is still running ahead of year-ago levels.

Overnight demand news... Pakistan recently purchased around 60,000 MT of soybeans that will likely be sourced from the U.S. or Brazil.

Today’s reports:

None.

First Thing Today: Spring Wheat Futures Surge on Ratings Drop

Thu, 12 Nov 2020 04:42:03 GMT

Wheat futures rally on drop in spring wheat ratings... Corn futures are steady to a penny higher after a quiet overnight session. Soybeans are narrowly mixed as of 6:30 a.m. CT. Spring wheat futures are up 10 to 13 cents in 2017 contracts thanks to an unexpected decline in condition ratings. Winter wheat futures are up 2 to 4 cents. The U.S. dollar index is marginally higher, while crude oil futures re sharply lower.

PF CCI: Another big drop for spring wheat... When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500 point scale, with 500 being perfect), the spring wheat crop dropped another 9.53 points to 317.36 points, signaling weekend rains provided little relief. Traders had anticipated an uptick in ratings, so the ongoing slide in conditions lifted HRS wheat overnight. Of the six major producing states, only Minnesota saw any improvement. Montana led the decline. Get more details .

PF CCI: Corn and soybean conditions improve slightly... The corn CCI climbed 3.57 points over the past week to 370.99 points, signaling rain helped the corn crop. Corn ratings are still down roughly 15 points from year-ago levels, however. Soybean condition ratings also climbed 1.25 points over the past week to 361.82 points. That crop is down 10.8 points from year-ago. Find more details here .

Consultant leaning down on corn and soybean estimates, but makes no official change... Crop Consultant Dr. Michael Cordonnier left his corn yield estimate at 167 bu. per acre, but he has a neutral to lower bias going forward. He notes that showers last week stabilized the crop for the time being, though more rains are needed. He also left his soybean yield estimate at 48 bu. per acre, with a neutral to lower bias. He explains that he thinks “it is a little too early to be really concerned about the soybean crop. Soybeans can experience adverse conditions during the month of June, but still do OK if the weather during July and August is beneficial.”

Replacement workers quit, meaning more disruptions for Argentine grain shipments... Yesterday we reported that the arrival of replacement workers got grain shipments back underway at Argentina’s main Rosario shipping hub, but those workers have now quit due to threats and intimidation from striking workers. This has again halted grain cargo ships. The strike is now entering its sixth day, with the head of the San Lorenzo delegation of the CGT saying the strike will continue and pledging to block access to port terminals. Also of note, Argentine farmers have been slow to sell soybeans to exporters due to low prices. Sales to exporters are down 22.6% from year-ago levels according to the latest official data.

Georgia special election eyed; South Carolina contest as well... The runoff election between Republican Karen Handel and Democrat Jon Ossoff has already become the most expensive House race in U.S. history – some $60 million plopped down by both parties as the GOP seeks to keep the seat vacated by Tom Price as he joined the Trump administration. The race remains close in the polls – a WSB TV/Landmark Communications poll June 15 showed Ossoff with 49.7% of the vote and Handel with 48% (3.5% margin of error). Cook Political Report House Editor David Wasserman forecasts a one-point victory for Ossoff. There is also a special race in South Carolina, where most expect Republican Ralph Norman to prevail over Democrat Archie Parnell.

Senators push for poultry policy focus in NAFTA 2.0 talks... A group of senators is pushing for poultry issues to be addressed via the upcoming NAFTA 2.09 talks. “We write to urge strong consideration for American poultry farmers, processors and exporters in the negotiation process, both in eliminating trade barriers imposed by Canada against American poultry and in ensuring that our poultry trade with Mexico remains robust,” the lawmakers said. While NAFTA was to have resulted in a goal of eliminating tariffs in goods traded between the three countries, the lawmakers said, “Unfortunately, in practice, this goal has proven difficult to achieve. This has been particularly true for American poultry, which continues to face trade barriers in North America more than 20 years after NAFTA’s enactment.” Meanwhile, Commerce Secretary Wilbur Ross is downplaying the potential for the NAFTA 2.0 talks to be wrapped up yet this year.

Smaller grain crop forecast for Kazakhstan... Kazakhstan will likely produce a grain crop totaling between 17 MMT and 18 MMT in 2017, the country’s ag minister said in its first forecast of the season today. This would be down from last year’s 20.6 MMT. The minister expects Kazakhstan to export between 8 MMT and 8.5 MMT of grain in the 2017-18 marketing year that kicks off July 1.

Big increase in Chinese farmer subsidies... China will issue around 2.56 billion yuan ($374.95 million) in subsidies aimed at encouraging farmers to rotate their corn plantings with other crops and to leave some land fallow this year, the Ministry of Finance announced today. This is a 78% increase in funding from last year, and the acreage targeted by the subsidies is also up sharply at around 800,000 hectares -- 133,000 hectares that must lie fallow and 667,000 hectares where producers must rotate corn with other crops. Chinese farmers also get “producer” subsidies for major crops.

Japan’s use of corn in feed rations down slightly from year-ago... The ratio of Japan’s use of corn in animal feed climbed to 46.4% in April, up 0.7 percentage points from March but 0.1 points down from year-ago levels, according to preliminary data from Japan’s ag ministry. Wheat made up 1.9% of its feed rations in April, steady with March but up 0.3 points from last year.

Drop in pork sales for China comes much sooner than expected... Chinese pork sales have fallen for the past three years and they are likely to drop again in 2017, according to data from the research firm Euromonitor. This peak in pork demand came much earlier than anticipated; many producers and experts had expected growth in pork demand to continue at least until 2026. Since the late 1970s, pork demand had expanded by an average of 5.7% per year until 2014. Young urbanites and white collar workers are increasingly focused on reducing fat in diets, swapping out meat for vegetables. And with childhood obesity on the rise, the Chinese government is pushing a nationwide shift in eating habits.

Futures signal bearish bias toward cash market... Traders appear to have a lower bias toward this week’s cash cattle action, extending rather than narrowing futures’ discount to last week’s trade that took place in a wide range from $125 to $135. Showlist estimates are up a net 12,000 head this week, with numbers up at at all major states. Boxed beef prices were mixed on Monday and movement failed to impress at 94 loads.

Cash hog bids continue to climb... A strong start to the week for the cash hog market eased concerns the market may be working on a top, giving traders incentive to push prices sharply higher. But while the pork cutout value firmed to start the week, movement was lackluster at 227.01 loads. Traders are hopeful buying for Independence Day will eventually improve product movement.

Overnight demand news... Japan hopes to buy a total of 135,747 MT of food-quality wheat from the U.S., Canada and Australia in its regular tender.

Today’s reports:

None.

First Thing Today: Argentine Exchange Raises Soybean Crop Outlook

Thu, 12 Nov 2020 04:42:00 GMT

Rains weigh on markets overnight... The arrival of needed rains weighed on the grain markets overnight. As of 6:30 a.m. CT corn futures are down 1 to 2 cents, while soybeans are 4 to 5 cents lower. Winter wheat futures are down 1 to 2 cents, while spring wheat contracts have slumped 9 to 10 cents. The U.S. dollar index is moderately higher, while crude oil futures are down slightly.

Weekly export sales out this morning... For the week ended June 8, traders expect corn sales between 600,000 MT and 1 MMT (500,000 MT to 700,000 MT old-crop and 100,000 MT to 300,000 MT new-crop), wheat sales between 350,000 MT and 550,000 MT, soybean sales between 350,000 MT and 750,000 MT (250,000 MT to 450,000 MT old-crop and 100,000 MT to 300,000 MT new-crop), soymeal sales between 50,000 MT to 250,000 MT (50,000 MT to 200,000 MT old-crop and 0 to 50,000 MT new-crop) and soyoil sales between 5,000 MT and 35,000 MT (5,000 MT to 25,000 MT old-crop and 0 to 10,000 MT new-crop).

NOPA expected to report modest uptick in crush for May... Members of the National Oilseed Processors Association will likely report they crushed 143.192 million bu. of soybeans last month, according to analysts surveyed by Reuters. This would be down 9.088 million bu. from last year, but up 4.058 million bu. from April. They expect the report to show soyoil stocks totaled 1.745 billion lbs. at the end of May, up 20 million lbs. from the month prior.

Argentine exchange ups soybean outlook... The Rosario grains exchange estimates Argentine farmers will harvest 57.3 MMT of soybeans this marketing year, which is a slight boost from its 57.0-MMT estimate last month. The exchange also projected wheat plantings will total 5.6 million hectares in 2017-18, which would be an 8% expansion from 2016-17. This is its first projection for the coming season.

Record-setting crops translate to big demand for silo bags in Brazil... The harvest of huge corn and soybean crops in Brazil has left farmers in need of quick and inexpensive storage solutions, since the country does not have enough silo space to handle the influx of grain. Ipesa do Brasil, a top producer of plastic silo bags, estimates that around 15 MMT to 20 MMT of grain could be stored in such bags this season, a 30% surge from two years ago. A record 80,000 silo bags were sold this year, says André Pessôa, a partner at Agroconsult. He details that under the right conditions, such bags can store grains for between six months and a year.

Hot, dry weather taking a toll on EU wheat crop... Strategie Grains has lowered its estimate of the European Union’s soft wheat crop by 1.1 MMT to 141.6 MMT, noting that heat and dry conditions in recent weeks have curbed crop prospects. However, this would still be up 5.5 MMT from last year’s crop. The consultancy detailed that the cut was due to lower yield projections for Spain, Germany and France. The EU will likely export 24.4 MMT of soft wheat in 2017-18, according to Strategie Grains, which is down 1.6 MMT from last month’s estimate.

Public comments requested on U.S./Mexico sugar trade accord... The Commerce Department is taking public comment on its preliminary agreement with Mexico to create a new ratio to address subsidized Mexican sugar imports to the U.S. Initial comments on the agreement are due June 21, rebuttal comments, June 26. Commerce and Mexico will sign a final the sugar deal June 30. Both governments and representatives from Mexico’s sugar industry initialed the accord on Wednesday. It is expected to be finalized after gathering feedback from the public over the next week. The sugar accord cuts the amount of refined sugar that Mexico can send to the U.S. to 30% of the total quota from 53%. It increases the proportion of raw sugar to 70%, while raising prices for both raw and refined shipments. However, a group representing major U.S. sugar refiners didn’t endorse the deal, saying it contains a loophole that would allow Mexico to continue dumping sugar into the U.S. at artificially low prices.

China’s central bank leaves rates unchanged... The People’s Bank of China has left interest rates unchanged, unlike its decision in March when it raised rates within hours of the Federal Reserve’s hike. Today and tomorrow will also see rate decisions in Turkey, Russia and Japan.

Farm bill listening session... The House Agriculture Committee will hold its first listening session away from Washington on June 24 to collect comments from farmers and others who will be affected by farm bill policies the committee writes this session. The hearing is in Gainesville, Fla., where the University of Florida is an agricultural research leader.

White House rural task force meets today... USDA Secretary Sonny Perdue today will lead the initial meeting of the White House Task Force on Agriculture and Rural Prosperity. Joining him will be Budget Director Mick Mulvaney, Trade Representative Bob Lighthizer, Energy Secretary Rick Perry and the chairman of the Federal Communications Commission, Ajit Pai, among other government officials. Today’s session is focused on how the task force can identify legislative, regulatory and interagency policy changes that will promote agricultural and economic development, as well as improve the quality of life in rural America, USDA said in a statement. A report with recommendations for action is due within six months.

First shipment of U.S. beef on its way to China... Nebraska’s Greater Omaha Packing says it sent a shipment of beef by air freight Wednesday to a buyer in Shanghai -- the first U.S. beef destined for China under the new trade agreement. It didn’t take long for the first shipment to be sent, as final protocols for exporters to ship beef to China were just announced Monday.

Futures remain sharply below cash cattle... Cash cattle trade in the Plains so far this week has come in $3 to $5 below the average cash price from last week. Despite the big discount futures hold to the cash market, they sold off aggressively Wednesday, with the June and August contracts ending limit down. As a result, the daily trading limit for live cattle futures is expanded to $4.50 today.

Pork demand stays strong... The pork cutout value inched only a penny higher Wednesday, but movement stayed strong at 317.30 loads despite the wholesale price being at its highest level since November 2014. Strong pork prices and movement have kept packer cutting margins deep in the black, which continues to support the cash hog market. Cash hog bids are expected to remain firmer across the Midwest today.

Overnight demand news... South Korea’s Korea Feed Association bought around 65,000 MT of yellow corn from optional origins, but it made no purchase in its second tender for up to 65,000 MT of corn. The country’s Korea Corn Processing Industry Association also bought around 60,000 MT of corn to be sourced from optional origins. Tunisia bought around 25,000 MT of soft milling wheat and 25,000 MT of feed barley from optional origins. Japan purchased 98,536 MT of food-quality wheat from the U.S. as well as 28,620 MT from Canada and 35,130 MT from Australia. Jordan made no purchase in its tender to buy 100,000 MT of feed barley.

Today’s reports:

7:30 a.m., Weekly Export Sales -- FAS
7:30 a.m., Drought Monitor -- USDA/NWS
7:30 a.m., Extended Weather Outlook -- NWS
11:00 a.m., Livestock, Dairy, & Poultry Outlook: June 2017 -- ERS
2:00 p.m., Turkey Hatchery -- NASS