News & Media

Market Briefs for October 12, 2017

China’s corn deficit
China’s ag ministry now estimates its corn supply deficit for 2017-18 will be 4.31 MMT, a dramatic increase from the 890,000 MT it predicted last month. The country lowered its corn crop estimate by 2.38 MMT to 210.1 MMT, explaining that plantings were lower than anticipated due to reduced government support. The ministry also raised its consumption estimate by 1.05 MMT to 215.62 MMT. But China plans to meet the supply shortfall with its reserves rather than imports.

Canada firm on dairy policies
There has been no give in Canada’s position regarding the country’s dairy policies. Canadian Prime Minister Justin Trudeau met this week with members of the House Ways and Means Committee, and he noted the importance of maintaining Canada’s production and trade policies. A U.S. proposal to reduce Canadian tariffs on U.S. dairy may be offered during the fourth round of talks this week.

Dow to offer new E3 soybeans
Dow AgroSciences says it will launch a genetically engineered soybean seed known as Enlist E3 in the U.S. next year with tight controls, as the seed is barred by major importers, including Europe and China. Archer Daniels Midland (ADM) has an arrangement with Dow to oversee the handling of the harvests to make sure they are not shipped to either region. Farmers who opt to plant E3 seed must agree to deliver their harvests to four ADM facilities at set times. Dow is frustrated with lengthy approval processes overseas. It submitted the E3 soybeans for clearance in Europe in 2012 and in China in 2013. And since it can take as much as 10 years and up to $150 million to develop such products, time is of the essence when it comes to getting such products to market.

Japanese beef import changes
At its second round of economic talks with the U.S. on Oct. 16, Japan plans to propose changes to its safeguard mechanism on frozen U.S. beef imports, according to two government sources cited by Reuters. Specifically, Japan plans to propose shortening review periods on beef imports from quarterly to every 10 days and allowing importers to voluntarily lower import volumes to stop the tariffs from automatically kicking in. But the sources are uncertain whether the U.S. will go along with the proposal. Currently, Japan automatically hikes tariffs on countries it does not have economic partnership agreements (EPAs) with if quarterly imports of specific beef products from all nations or those without EPAs rise more than 17 percent from the previous years. This mechanism was triggered earlier this year, boosting taxes on frozen beef imports from the U.S. and others without EPAs.

Perdue wants food stamp restrictions
The distribution of food stamps to Americans who are able to work came under criticism by Agriculture Secretary Sonny Perdue, speaking at the Wall Street Journal Global Food Forum on Oct. 10. Perdue said relying on food stamps has become a “lifestyle” for some able-bodied adults. “We want the people who need the help to get it,” he said, adding that the benefit shouldn’t be “the whole enchilada” of a family’s food security. He suggested that enrollment in the program would fall if individuals who are able to work are restricted from using it. The topic will continue as the new farm bill unfolds. The Trump administration has called for cuts to food stamp disbursements.

China cotton imports
China’s National Development and Reform Commission has set a cotton import quota at 894,000 MT for 2018, reports its industry website This would be steady with 2017 levels.

USDA suspends CRP signup
Approval of new offers made under the continuous Conservation Reserve Program (CRP) signup has again been temporarily suspended until sometime later in fiscal 2018, which began Oct. 1, according to U.S. Department of Agriculture. And the processing of pending offers made before Sept. 30 is currently underway. USDA said the current enrollment in CRP is around 23.5 million acres, just 500,000 acres below the 24-million-acre cap imposed via the 2014 Farm Bill.

Corn to cotton in Brazil
Brazil will likely produce a 7.73 million-bale cotton crop in 2017-18, estimates an ag attaché in the country. This would be a 10-percent increase from the year prior and tops USDA’s official crop estimate of 7.50 MMT. The post details that cotton harvested area is likely to climb around 15 percent from last year as higher cotton prices have encouraged farmers to shift some safrinha corn acres to cotton.