China’s Ministry Lowers 2018/19 Corn Use, Imports

China’s Ministry Lowers 2018/19 Corn Use, Soybean & Cotton Imports

China cited African swine fever as the reason behind the lower consumption of corn.

农业部削减玉米消费by two million tonnes, but raised its import forecast slightly due to a reduction in U.S. sorghum imports.

China cut its soybean import forecast 1.5 million tonnes to 83.5 million on lower-than-expected July shipments.

The reduction of the hog herd is cutting demand for corn and soybeans, but the ministry does look for a modest year-over-year increase in soybean imports.

China’s ministry cut its cotton import estimate by two million tonnes, with the agency citing unfavorable exports from China’s textile industry.

What It Means for the U.S. Farmer:China has not been a major importer of U.S. corn, but these moves further underscore the seriousness of the internal hog herd issues China is facing. FBN looks for the trade war between the U.S. and China to continue, with Brazil being the key winner for both soybean and cotton imports.

U.S. Corn Lobby Angered by EPA’s Granting of 31 Small Refinery Waivers

The waivers were granted on Friday with the move not welcomed by ethanol and corn producers.

While the number of granted waivers is lower than last year’s 35, the corn and ethanol industries still look at it as a bail out to the oil industry.

The waivers free refineries from the Renewable Fuel Standard to blend biofuels into gasoline or to purchase credits from other refineries that do.

The U.S. ethanol industry has been under pressure recently with large stocks and weak spreads.

While stocks were lower in latest week, they are about 5% higher, year to date, compared with last year.

What It Means For The U.S. Farmer:USDA’s ethanol use forecast in the 2018/19 balance sheet is lower, year over year, with only modest growth forecast for 2019/20. The trade war with China along with the granting of waivers by the Trump administration are cited as key elements, by some in the industry, that are contributing to the weak margins and could result in the eventual shutdown of plants. FBN looks for the corn market to remain focused on supply issues in the near term, but the demand side of the balance sheet is not encouraging.

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—Kevin McNew