Soybeans Fall as U.S.-China Sentiment Curdles
November 11 2019 - 04:23PM
Dow Jones News
By Kirk Maltais
-- Soybeans for January delivery fell 1.5% to $9.17 a bushel at
the Chicago Board of Trade on Monday in reaction to President Trump
over the weekend saying no agreement had been made regarding the
two sides dropping tariffs.
-- Corn for December delivery dropped 1.1% to $3.73 1/4 a
bushel.
-- Wheat for December delivery fell 0.9% to $5.05 3/4 a
bushel.
HIGHLIGHTS
Tariff Tea Leaves: While President Trump said negotiations
between the U.S. and China are going "very nicely," reports of an
agreement between the two sides to drop tariffs weren't accurate.
This pushed commodities prices down across the board Monday, with
soybeans being the most sensitive to U.S.-China trade fallout.
Brawny Brazil: Traders also continued to react to the results
from Friday's WASDE report from the USDA that showed soybean
production and yield estimates untouched from the previous month, a
surprise for traders looking for cuts to both. In Brazil though,
agricultural consultancy AgRural estimates that 58% of Brazilian
soybeans have been planted for the 2019-20 growing season, 1% point
ahead of last year.
The strong showing could mean that Brazil will be capable of
filling China's soybean needs, bad news for U.S. growers who need
China to buy their beans.
INSIGHT
Weighing WASDE: Friday's monthly WASDE report from the USDA
appears to have given grain traders the answers they were looking
for regarding corn and soybeans supply: figures provided by the
agency in October are more or less accurate.
While final production and yield figures will be released in
January, the USDA isn't likely to adjust their figures for 2019-20
production and yields much further, says AgResource. "The USDA's
November WASDE has largely put US supply uncertainty to rest," says
the firm, adding the USDA could possibly move corn production
estimates down in December.
Lender of Last Resort: High-interest loans from third-party
lenders -- companies that don't have to follow the same rules as
banks -- are helping some farmers that have hit lean times for crop
prices, but dragging others already underwater in the current
market even lower.
"As a first-generation farmer, capital is hard to come by," said
Indiana soybean farmer Raymond Modglin, who said he was unable to
borrow from the banks in his area and entered into an agreement for
a $400,000 credit facility with a third-party lender, one that
ultimately led to his declaring bankruptcy after the lender quickly
foreclosed on him. The impact of farmers such as Mr. Modglin being
unable to farm may hit grain production in the 2020-21 planting
season.
AHEAD:
-- The USDA is scheduled to release weekly grain export
inspections data at 11 a.m. EST Tuesday, delayed from regular
Monday release because of the Veterans Day holiday.
-- The USDA is scheduled to provide its weekly update on U.S.
crop progress at 4 p.m. EST Tuesday.
-- The EIA is scheduled to release its weekly update on ethanol
production and inventories at 10:30 a.m. EDT Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
November 11, 2019 16:08 ET (21:08 GMT)
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