The leaders of the world’s two largest economies will meet this week, in hopes of resolving some trade conflict.
AUDIO: Brian Grossman, Zaner Ag Hedge
President Trump and President Xi plan to meet at the G20 Summit, in Buenos Aires, Argentina. The meeting, to be held later this week, provides an opportunity to discuss the ongoing trade dispute. Brian Grossman, market strategist with Zaner Ag Hedge, says the soybean bean market is under heavy pressure ahead of the highly anticipated meeting.
“There is a lot of hope and a lot of anxiety as to how that is going to play out,” Grossman said. “Aside from what’s coming later this week, today we have the U.S. dollar up 1.4-percent on the Brazilian real. That is not something we want to see considering China is, for the most part, proving they don’t need our soybeans. Seeing that currency benefit going to South America makes the door open wider for other countries to go down there and buy beans.
January soybeans closed down 18 ¾ cent and soybean meal closed down $2.90 on Monday. Grossman says news coming out of the G20 Summit will determine the future of soybeans.
“I’m watching to see if any kind of news comes out in front of the G20 Summit, and China makes some decisions based off of that,” Grossman said. “Guys that need to be making sales by the end of the calendar, down 22 ½ today (Monday) is ugly. But if we walk away from that G20 Summit without a deal, it could be much worse.”
Despite tough trade relations, exports have done reasonably well. Grossman gives us the latest on soybean export inspections.
“Given the trade environment we’re in, 1.1 million metric tonnes is not a bad number. We’d like to see that higher, but we all know the current trade situation,” Grossman said. “Corn was a decent one, 1.1 million metric tonnes, at almost twice what we had at this time last year. Wheat was a real disappointment, coming in at 252,000. I’ve been saying consistency, but this week definitely on the low side.”