Markets Seek Trade Deal Clarity

Markets Seek Trade Deal Clarity Ahead of Next Week’s USDA WASDE Report

The USDA’s February WASDE report forecast will not include Phase 1 trade details about China's purchase commitments from the deal signed on Jan. 15.

USDA analysts have not been told buying targets for each farm product included in the trade deal.

The trade deal called for China to increase its purchases of U.S. agricultural commodities by $40 billion over the next two years.

Soybean export sales from the United States have remained sluggish since the deal was signed.

随着南美收获的开始，中国对美国出口的需求通常会减慢。

The USDA’s February WASDE will be released on Feb. 11 at 11 a.m. CST

FBN’s Take On What It Means:We believe that the path to China’s goal of increased US agricultural commodity purchases is long and involves other commodities aside of soybeans and corn. We would not be surprised to see the USDA account for some incremental Phase-1 driven export demand for soybeans, wheat and possibly corn in the February WASDE.

China Cuts Tariffs on $75 Billion of US Goods

On Thursday, China said it would halve additional tariffs levied against 1,717 U.S. goods last year, following the signing of a Phase 1 deal.

China's finance ministry said that starting on Feb. 14, additional tariffs levied on some goods will be cut to 5% from 10% and others lowered to 2.5% from 5%.

The products affected by the new rule are among $75 billion of goods hit by Chinese tariffs of 5% to 10% tariffs that came into effect on Sept. 1.

Some of these items include pork, beef, soybeans and whiskey.

China’s decision follows Washington's move to reduce the tariff from 15% to 7.5% on $120 billion worth of Chinese goods starting Feb.14.

FBN’s Take On What It Means:尽管中国如何实现农业商品的美元目标，但我们认为，对我们大豆，家禽和牛肉的关税减少可能对现金和期货价格都有益。

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

—Kevin McNew