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June 19, 2018 | Global Ag News Highlights

USDA Agency Reports

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Grains are lower. SU is down 24 cents and near 8.95. CU is down 8 cents and near 3.57. WU is down 10 cents and near 4.91. Trade wars and good US weather are not bullish. US Dollar is higher. Crude is lower. US stocks are lower. Trade wars are not bullish. 

Even before trading partners imposed tariffs, U.S. farmers were facing a tough year. Net farm income was expected to fall 6.7 percent to $59.5 billion in 2018, according to the U.S. Agriculture Department. Now an even more bearish tone hangs over agricultural markets due to trade spats with NAFTA partners Canada and Mexico, plus mounting tensions with China and Europe. After Trump imposed tariffs on steel and aluminum imports, Mexico imposed a 20 percent tariff on imports of U.S. apples, potatoes and cranberries. Last week, Trump imposed $50 billion in tariffs on China. Beijing retaliated with a 25 percent tariff on U.S. soybeans and other goods starting July 6, sending soybean futures to a two-year low and throwing into doubt forecasts for U.S. soybean exports to rise 11 percent this marketing year. China's tariffs could contribute to a 30 percent drop in income for Ohio corn and soybean farmers this year, said Ben Brown, manager of an Ohio State University farm program. If the tariffs stay in place, net farm income in Ohio could drop as much as 63 percent in 2019, he said. 

China's Foreign Ministry on Tuesday urged the United States to stop its damaging words and deeds, after President Donald Trump threatened to impose a 10 percent tariff on $200 billion of Chinese goods. Ministry spokesman Geng Shuang made the comment at a regular news briefing, adding that China did not want a trade war but was not afraid of one. 

China's most active soymeal futures rose 4.2 percent on Tuesday to 3,073 yuan ($476.75) a tonne, after Beijing imposed a 25 percent duty on soybean imports from the United States. The jump was the biggest daily gain since April 9, when markets reopened after Beijing first proposed a tariff on U.S. soybeans in retaliation over Trump's trade measures against China. China buys around a third of its soybeans from the United States to crush into meal to feed the world's biggest herd of pigs and poultry. The implementation of the tariff from July 6, announced late on Friday in retaliation for Trump's imposition of tariffs on Chinese goods, will push up the cost of soybeans, making soymeal more expensive. 

Winter Wheat conditions were 39% good to excellent versus 38% last week and 49% a year ago. Winter Wheat harvest was 27% complete versus 19% average. Corn crop conditions 78% good to excellent versus 77% last week and 67% a year ago---trade estimate 76%. Soybean conditions 73% good to excellent versus 74% last week and 67% a year ago---trade estimate 74%.

Yesterday’s weekly export inspections had U.S. wheat exports running 51% behind a year ago with the USDA currently forecasting a 6% increase, corn 9% behind (unchanged), and soybeans 7% behind (a 5% decline). 

The U.S. Midwest weather forecast still has mostly soaking rains this week, quiet for the weekend, and a return of rains the first half of next week---temps begin to cool.

The U.S. Southern Plains weather forecast has average to above average precip for Kansas and the panhandles-----temps will be running above average. 

Funds bought 6,000 soybeans and 2,000 soyoil and sold 3,000 soymeal, 18,000 corn and 7,000 wheat on Monday. Funds are estimated to be short 22,000 soybeans, long 73,000 soymeal, net short 78,000 soyoil, short 27,000 corn and short 8,000 wheat.

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