China appear to be the real winners in the US soybean tariff war. Basically the US price of soybeans has fallen since China walked away from US beans. China bought a bunch of beans from Brazil, prices in Brazil were supported but are now very close to par with US beans. China required around 5mt to close out their import demand for the year.
The US and China have confirmed a “sale” of what most think is 5mt of tariff free beans to China. Brazil need to make a sale of around 6mt to meet export projections but the US sale may prevent this unless Brazil values fall and bean prices buy this volume, the volume that is presently said to be allocated to US beans. Well played China, well played.
Wheat futures stagnated on the back of ample world supplies and slow demand.
Interesting to see on this week’s WASDE report that the USDA has Australia pencilled in as a wheat importer of around 350kt for 2018-19 but just 150kt for 2019-20. I would expect to see this volume increase in later reports.
Black Sea shipments of wheat continue to be strong but are a little lower year on year. Wheat out of the Black Sea is offered at US$181.50 per tonne for low grade milling wheat. Feed wheat is a little cheaper. Milling wheat out of the Black Sea could move into Asian markets for roughly US$8.00 under current WA offers. This isn’t much given the better quality of white wheat, Aussie values are not high.