U.S. beef exports to expand
President Donald Trump claimed a big prize during his recent meeting with Chinese President Xi Jinping by expanding U.S. beef exports to China, White House spokesman Sean Spicer said, though he didn’t offer details on any tangible steps taken toward ensuring greater access.
China in September removed a ban on shipments of some U.S. beef products, opening up the trade for the first time since 2003 as the Asian nation sees a surge in imports of the meat. Still, conditions attached to the reopening, including Chinese requirements for an acceptably traceable U.S. meat supply, have held up sales.
No concrete changes to the earlier agreement resulted from last week’s meeting, but “the plan was to put together a plan” on beef and other issues, Spicer told reporters in a White House press briefing.
Chinese bean, corn imports
China’s ag ministry raised its 2016-17 soybean import forecast by 1.24 MMT to 86.55 MMT, as the country raised its soybean consumption peg. The ag ministry now expects China to run a soybean balance deficit of 1.89 MMT, versus its prior forecast for a deficit of 2.19 MMT. The ministry also raised its 2016-17 corn import estimate by 200,000 MT to 1 MMT. It expects corn ending stocks to total 5.11 MMT this marketing year, which is up 700,000 MT from its previous peg.
Cotton AWP moves lower
The Adjusted World Price (AWP) for cotton was 67.41 cents per pound, effective Apr. 11, down from 68.03 cents per pound the prior week. This is the lowest the AWP has been since it was at 66.59 cents the week of March 3 and came after three out of the last four weeks have seen the AWP at 68 cents per pound or more.
Global food prices soften
The Food and Agriculture Organization of the United Nation’s (FAO) Food Price Index averaged nearly 171 points in March, which was down 5 points (2.8 percent) from February, but still up 20 points (13.4 percent) from year-ago levels. All of the commodity indices except meat fell last month, with sugar and vegetable oil prices leading the retreat. FAO’s initial world cereal supply-and-demand outlook for 2017-18 “points to another season of relative market tranquility, with global production declining only slightly.” But with relatively weak growth in utilization, it says world cereal stocks will remain near record levels. FAO projects global wheat production will drop 20.3 MMT from a year ago to 740 MMT in 2017 due mainly to “price-induced cuts” in Australia, Canada and the United States.
Soy pulls Brazil from recession
Brazil’s economy grew between 0.1 percent and 0.3 percent for the first quarter of 2017, with the record soybean crop credited for pulling the nation out of recession, according to economists. While Brazil’s ag output accounts for just 5 percent of Brazil’s economy, the sector may have climbed as much as 8 percent from the fourth to the first quarter, according to private estimates. Economists expect a broader recovery later this year, with annual growth projected at 0.5 percent.
Strong pace for meat exports
February results for U.S. pork and beef exports were well above year-ago levels, with pork exports posting the strongest February volume on record, according to statistics released by the U.S. Department of Agriculture and compiled by the U.S. Meat Export Federation. Beef exports totaled 90,417 MT in February, up 9 percent year-over-year, with value up 16 percent to $508.5 million. Through February, beef exports were up 13 percent in volume (186,905 MT) and 17 percent in value ($1.02 billion).
Updated supply and demand numbers
Rice: U.S. rice ending stocks for 2016-17 are lowered 3 million cwt on increased exports. At 49.1 million cwt, these would still be the largest all rice ending stocks since 1986-87. The 3-million-cwt export increase is all rough rice, which is record large at 46 million cwt, but split with 2 million for long-grain and 1 million for medium and short-grain.
Soybeans: U.S. soybean supply and use changes for 2016-17 include higher seed use, reduced residual disappearance and higher ending stocks. Seed use is raised in line with the record plantings indicated in the March 31 Prospective Plantings report, and residual use is reduced based on indications from the March 31 Grain Stocks report. With exports and crush unchanged, soybean ending stocks are projected at 445 million bushels, up 10 million from last month.
Cotton: The 2016-17 U.S. cotton supply-and-demand forecasts show higher exports and lower ending stocks relative to last month. Production and domestic mill use are unchanged. The export forecast is raised 800,000 bales to 14 million, based on strong export sales during March. This would be the fourth-largest volume ever for U.S. exports, accounting for nearly 40 percent of world trade. Ending stocks are now forecast at 3.7 million bales, equivalent to 21 percent of total disappearance.