Is China buying U.S. soy? Washington shutdown keeps traders guessing By Reuters

By Julie Ingwersen

CHICAGO (Reuters) – Commodity traders are at midnight due to the partial U.S. authorities shutdown, unable to see daily and weekly experiences of agricultural exports to acquire clues as as to whether China is following via with guarantees to purchase grain and soy amid the continuing commerce battle.

Traders have been anxiously awaiting proof from the U.S. Department of Agriculture that China is ramping up purchases of grains and soy from U.S. farmers, who’re making ready their spring planting and making an attempt to safe financing for seeds, fertilizer and land rents.

Now, commerce consultants and grain analysts warn the suspension of the experiences is clouding {the marketplace} and probably giving a bonus to huge grain corporations immediately concerned within the export commerce. The authorities shut down partially at midnight on Dec. 21.

“We’re watching sales to China like a hawk,” stated Ted Seifried, vp and chief ag market strategist for the Zaner Group.

Beijing resumed buying U.S. cargoes earlier this month, after the 2 international locations agreed on Dec. 1 to a commerce battle truce. But hefty tariffs on U.S. cargoes stay in place, and there’s uncertainty over how a lot the highest U.S. soybean buyer will buy.

The hole additionally provides the massive business grain retailers – akin to Archer Daniels Midland Co (N:), Bunge Ltd (N:), Cargill Inc () and Louis Dreyfus Corp [LOUDR.UL] – a bonus by permitting them to maintain their export offers with international locations like China and Mexico out of the general public market.

ADM and Cargill stated on Friday they’d no remark. The different two corporations couldn’t instantly be reached for remark.

Rich Feltes, vp for analysis with Chicago-based brokerage R.J. O’Brien, stated the absence of USDA export gross sales knowledge can improve the danger concerned in buying and selling agricultural markets, pushing speculators to the aspect.

“It gives a little bit of unfair advantage to exporters who either are or are not making sales, and can trade that information accordingly,” he stated.

Along with its weekly export gross sales experiences, the USDA has issued daily bulletins of grain and soybean gross sales over 100,000 tonnes since 1977. The reporting system was launched in response to the acquisition of hundreds of thousands of tonnes of U.S. grain by the Soviet Union in 1972 in offers that resulted in hovering U.S. grain and food costs

FARMERS AT RISK

University of Illinois agricultural economist Scott Irwin stated the partial shutdown might additionally deal a blow to farmers affected by the U.S.-China dispute, by delaying assist funds meant to assist offset a few of the losses for crops hit by retaliatory Chinese tariffs in a commerce battle launched by U.S. President Donald Trump.

“If you’re talking about cash in the farmer’s pocket, the longer this goes on, the longer it’s going to delay that program, which is really just getting ramped up,” Irwin stated.

The shutdown entered its seventh day on Friday, and was on observe to proceed into subsequent week and presumably longer. It impacts about 800,000 staff of the Departments of Homeland Security, Justice, Agriculture, Commerce, and different businesses.

If the shutdown persists, it additionally might jeopardize the discharge of a number of hotly anticipated month-to-month and quarterly grain provide and demand experiences.

The USDA on Friday reiterated that the shutdown, if it continues, would halt its World Agricultural Supply and Demand Estimates (WASDE) report and experiences by its National Agricultural Statistics Service, which tracks quarterly U.S. grain shares and U.S. winter wheat seedings.

Those experiences, together with an annual abstract of U.S. crop manufacturing, had been scheduled for launch on Jan. 11.

In the experiences, Feltes stated analysts anticipated to see the USDA trim its estimates of the typical 2018 U.S. corn and soybean yields, indicate sturdy feed utilization of corn within the first quarter, and make clear what number of acres of winter wheat farmers had been capable of plant this previous autumn, given extreme rains in lots of areas.

“Those are all bullish influences that we are going to be denied confirmation of,” he stated.