Comments from the cow side on the trade war...
- Thread starter Overnight
- Start date
Just when we thought the trade deal was done, there's always another angle...
Today's daily...
"...Reading the tea leaves of future Chinese trade relations with the U.S. is difficult. The recent verbal war between the leaders of the two countries does little to reveal the outcome. President Trump is changing the trade status of Hong Kong but his actions need further governmental support before they become official. There has been little recent media information about the status of Phase I of the trade agreement or if it still is on track to happen. The protein shortage in China will not go away with or without the U.S. trade deal, and if they don't buy from us, they will buy from someone. This will take beef off the market that might otherwise have been destined for our soil. Both pork and beef traders will be nervous in anticipation of trade actions that are important to both meats. Senator Grassley announced that he sees the Chinese continuing with the trade deal..."
Today's daily...
"...Reading the tea leaves of future Chinese trade relations with the U.S. is difficult. The recent verbal war between the leaders of the two countries does little to reveal the outcome. President Trump is changing the trade status of Hong Kong but his actions need further governmental support before they become official. There has been little recent media information about the status of Phase I of the trade agreement or if it still is on track to happen. The protein shortage in China will not go away with or without the U.S. trade deal, and if they don't buy from us, they will buy from someone. This will take beef off the market that might otherwise have been destined for our soil. Both pork and beef traders will be nervous in anticipation of trade actions that are important to both meats. Senator Grassley announced that he sees the Chinese continuing with the trade deal..."
A trade-related blurb from today...
"...There continues to be media coverage of the relations between the U.S. and China with emphasis in ag publications on the Phase I trade agreement and, whether it will be implemented or not, as relations sour between the two countries. Whether it is soybeans, corn, pork or beef, if the Chinese need these agricultural products and are comfortable with the price, they will buy them -- trade agreement or not. The price implications to our markets also does not depend on them buying the products from us. If they purchase the ag products elsewhere, we will benefit from improved prices for our ag products because those countries will have less ag products to put on the global markets.
Trade agreements are fine but rarely do countries enter into transactions that fail to benefit them because of a trade agreement. One of the most important factors in determining value for foreign trade is the Dollar exchange rate. Most recently the dollar has moved down in value, favoring the purchase of U.S. goods including beef..."
"...There continues to be media coverage of the relations between the U.S. and China with emphasis in ag publications on the Phase I trade agreement and, whether it will be implemented or not, as relations sour between the two countries. Whether it is soybeans, corn, pork or beef, if the Chinese need these agricultural products and are comfortable with the price, they will buy them -- trade agreement or not. The price implications to our markets also does not depend on them buying the products from us. If they purchase the ag products elsewhere, we will benefit from improved prices for our ag products because those countries will have less ag products to put on the global markets.
Trade agreements are fine but rarely do countries enter into transactions that fail to benefit them because of a trade agreement. One of the most important factors in determining value for foreign trade is the Dollar exchange rate. Most recently the dollar has moved down in value, favoring the purchase of U.S. goods including beef..."
A Trump trade-war blurb! Whoop!
From the new weekly...
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THINGS ARE NOT ALWAYS WHAT THEY SEEM
"A high Chinese official let a few people know that China was positioned well for current grain needs and was selling some contract old crop corn bought in the United States. The markets reacted with old crop corn falling and the Chinese pounced. Two day later the news is released of another large Chinese purchase of old crop corn.
As President, Trump spent a considerable amount of time negotiating trade agreements with the Chinese. The administration frequently used tariffs on Chinese goods for leverage to acquire trade consessions. The Chinese often retaliated and the result was a confusing tit for tat that left many observers confused about the implications and impacts of each move.
The African Swine flu changed the turrain for ag products and with the loss of half of the Chinese pigs, they badly needed both to fill in with imported pork and beef and rebuild using American corn and soybeans. One thing you can trust -- the Chinese will do whatever is in their national interest and little that is not. With a command economy the government calls the shots and the news stream. Informational releases should be treated with little reliance on the content. Trust should be used sparingly.
Spin is not new to the ag markets. We all know traders whose views are shaded with their own positions. We also should be wise enough to recognize an abberant price for fed cattle does not always reflect the true market both up or down. There is usually a backstory and it not always finds its way into market dialogue. Individuals speak from self interest much the same as a country.
The difference is controlled speech. Rumors of misleading information given into the ag markets in this country can be vetted by the participants and critiqued and refuted. When the Chinese speak, few dare expose misinformation. The ones suffering the damage are those gullible traders who accept Chinese statements as fact and trade on the information."
From the new weekly...
-------
THINGS ARE NOT ALWAYS WHAT THEY SEEM
"A high Chinese official let a few people know that China was positioned well for current grain needs and was selling some contract old crop corn bought in the United States. The markets reacted with old crop corn falling and the Chinese pounced. Two day later the news is released of another large Chinese purchase of old crop corn.
As President, Trump spent a considerable amount of time negotiating trade agreements with the Chinese. The administration frequently used tariffs on Chinese goods for leverage to acquire trade consessions. The Chinese often retaliated and the result was a confusing tit for tat that left many observers confused about the implications and impacts of each move.
The African Swine flu changed the turrain for ag products and with the loss of half of the Chinese pigs, they badly needed both to fill in with imported pork and beef and rebuild using American corn and soybeans. One thing you can trust -- the Chinese will do whatever is in their national interest and little that is not. With a command economy the government calls the shots and the news stream. Informational releases should be treated with little reliance on the content. Trust should be used sparingly.
Spin is not new to the ag markets. We all know traders whose views are shaded with their own positions. We also should be wise enough to recognize an abberant price for fed cattle does not always reflect the true market both up or down. There is usually a backstory and it not always finds its way into market dialogue. Individuals speak from self interest much the same as a country.
The difference is controlled speech. Rumors of misleading information given into the ag markets in this country can be vetted by the participants and critiqued and refuted. When the Chinese speak, few dare expose misinformation. The ones suffering the damage are those gullible traders who accept Chinese statements as fact and trade on the information."