2/5/19: Mark's "Market Talk" Blog

Trade meetings take place, the USDA returns to work, Mother Nature shuts the Midwest down

A Chinese trade delegation came to DC last week and spent 2 days talking to our people. As of Friday afternoon there wasn’t much news other than they agreed to meet again in about 3 weeks in China. We all want a quick resolution to this tariff business but high level talks like these take a lot of time. There was something on the wire that they did buy 32 million bushels of beans this week as a good will gesture. The trade is still waiting for more bean sales and the possibility they will buy corn and ethanol. It seems the biggest holdup in all of this is the discussion of intellectual property. Most people don’t even know what this means but my simple explanation is “when you sell your soul to the Chinese”. They have forced many companies over the years to hand over patents, grandma’s recipes, and the how to of business in return of the Chinese providing cheap labor and manufacturing. Now the American companies are left just being a cog in the wheel without full ownership of their products. This didn’t happen overnight and it may have involved a little of greed among some of the American companies that were involved. Once again agriculture is taking it on the chin for something that we weren’t involved with. There was a lot of movement in the markets last week but once the dust settled Friday corn was 2 lower while beans were down 10 or 12. Basis levels for both were firmer for nearby delivery all week as the brutal weather kept a lot of trucks at home. This will disappear this coming week if more favorable weather moves in. The USDA did return to work and started putting long overdue reports out. You would have thought they would have combined several weeks of reports such as export sales and released them all at once. It didn’t happen that way as they are releasing them in small groups on a set schedule. This is all old news so the sooner it is released the better. This Friday will be a big day as the February report will now include the final 2018 crop yield estimates that should have came out in January. We can only hope that President Trump and Congress will come to a long term funding agreement before the current one runs out in a couple of weeks and we shut down again.     

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