The United States markets entered 2019 on a sore note. What producers need to keep an eye out moving forward, up next.
Analysts shift their attention to the government shutdown, in hopes of seeing its near-end. Jim McCormick, senior adviser with Allendale, says “the sooner, the better.” McCormick worries about impacts this event will have on next week’s report.
“The reality is – This has become a real problem,” McCormick said. “The longer this delays itself, the more it puts next week’s major report at risk. That report data is huge. It’s Quarterly Grain Stocks, Winter Wheat Acreage, final production estimates for the U.S. crop and revisions of South America’s crop. These numbers tend to set the tone for production and planting.”
United States producers heavily rely on information from this report. McCormick says the final production numbers from 2018 will help producers determine what and how much to plant in 2019.
Unfortunately, the government shutdown is not the only issue impacting rural America. McCormick provides an update on the ongoing trade battle with China.
“Next week, trade representatives are going to meet with the Chinese mid-level, and hopefully we can make some progress,” McCormick said. “We got some negative news over the holiday that China’s economy is contracting from the PMI. They’re feeling the economic crunch of the trade sanctions. On the other hand, the U.S. stock market took a beating the latter half of 2018 and started 2019 on a pretty sour note.”
The U.S. stock market was not the only market to see impacts of the trade war. McCormick talks about the steep decline in soybean prices.
“Remember, China definitely impacts the U.S. price,” McCormick said. “The price of beans were 80 cents lower coming into 2019 compared to where they were at in 2018, and that has to do with China not buying U.S. beans. We need to get them back; they’re the big consumer of soybeans.”