Corn: Steady up 1 cent
Soybeans: Down 1 to 3 cents
Wheat: Down 1 to 3 cents
General Comment: Soybeans and U.S. stocks seen starting the holiday-shortened week on a cautious, wait and see mode ahead of trade talks between China and the U.S. Traders also eagerly await USDA data on six weeks of export sales data scheduled for update on Friday. Trade negotiations begin again today in Washington with Vice Premier Liu He scheduled to meet U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Feb. 21-22. Steve Censky, the Department of Agriculture’s Deputy Secretary, said at an industry conference yesterday that talks are “picking up” ahead of the March 1 deadline for the imposition of new U.S. tariffs, despite few signs of progress to date. The World Trade Organization’s quarterly outlook indicator, a composite of seven drivers of trade, showed a reading of 96.3, the weakest since March 2010 and down from 98.6 in November. A reading below 100 signals below-trend growth in trade. "This sustained loss of momentum highlights the urgency of reducing trade tensions, which together with continued political risks and financial volatility could foreshadow a broader economic downturn," the WTO said in a statement.
Meanwhile, the U.S. is reviewing trade practices in the European Union with the possibility of imposing tariffs on imports of European. Imposition of U.S. auto tariffs would likely lead to Europe would buying less soybeans and liquid gas from the U.S., the head of the European Commission Jean-Claude Juncker said on Monday. EU has bought 154 million bushels of U.S. soybeans this marketing year. "Trump has given me his word that there will be no car tariffs for the time being. I believe him, Junker said.
China will stabilize its production of grains, increase imports of agriculture products where there are shortages in the domestic market and diversify import channels, according to the document issued by State Council, and published by state media Xinhua news agency. The statement came as China's economic growth in 2018 hit a 28-year-low, with Beijing entangled in a trade war with Washington.
Weekend weather was within expectations of Friday’s reports, and today’s forecast shows more rains for parts of Brazil, slightly drier and cooler in Argentina. More specifically, numerous cool fronts produce widespread rain in Brazil over the next week, while keeping temperatures slightly cool. Hot weather in Argentina continues this week and breaks by Friday with some scattered rain, then another cool and dry period follows for the following 10 days.
Corn: market seen steady to firmer after prices bounced off support last week. Volume was heavy last night after prices opened lower and rebounded. China will allow imports of corn and barley from Uruguay starting this month, two separate notices from the General Administration of Customs said on Tuesday. The new trade move came as Beijing pushes to diversify imports amid rocky trade relations with its major grain suppliers, including the United States and Australia. JBS SA, the world's largest meatpacker, is importing more corn from Argentina into Brazil for feed as rising local freight costs push up prices for the domestic crop, according to Reuters.
Soybean futures seen slightly lower after failing to hold overnight gain ahead of China trade talks Underlying support continues from Friday’s news of another record crush in January. NOPA members processed 171.63 million bu. of soybeans last month, up from 163.111 million a year ago. Brazil's soybean harvest advanced to 36% of the planted area, 19 points above this time last season as some farmers sowed the soy earlier and then speeded up harvesting due to dry and hot weather. Those supplies will soon be competing with U.S. exports.
Wheat futures seen weaker as on large global supplies and falling prices limit demand for U.S. wheat. SRW futures fell 13 cents last week with HRW dropping 16 cents. Spring wheat futures were down about 4 cents. Algeria's state grains agency last week bought 600,000 MT of milling wheat at a tender at about $15 per MT cheaper than Algeria’s purchase in January. Australia raised its wheat crop estimate to 17.3 MMT from 16.95 MMT forecast in December. Production seen down from 21.24 MMT last year and the smallest since 2007-08
Cattle: Steady to firm
Hogs: Mixed to firm
Cattle futures seen steady to firm on higher beef prices and steady cash cattle last week. Wholesale Choice carcass values rose 78 cents and Select gained 58 cents on Friday. Slaughter was 596,000 last week, down from 620,000 a week earlier and 602,000 a year ago.
Hog futures are seen steady to mixed on light follow-through buying to Friday’s solid closed. Fresh pork values rose 27 cents on light sales. Gains will be contained by lower cash prices and plentiful slaughter supplies. National average cash hogs down 21 cents on Friday but Iowa-Minnesota fell $2.28. Slaughter was 2.514 million head, up 5.2% from a year ago. Deferred futures seen supported on export speculation. Vietnam confirmed first case of Africa swine fever (ASF) on three farmers, the government said Tuesday. Pork accounts for 75% of total meat consumption in Vietnam. China Ag Ministry reported new cases of ASF in southern Guangxi Autonomous Region fir the first time. China’s government warned pork processing companies to improve their management to guard against ASF after media reports three batches of dumplings tested positive for nucleic acid associated with ASF.