Miller Magazine Issue: 122 February 2020

87 MARKET ANALYSIS MILLER / FEBRUARY 2020 for a while. However, what nobody could have seen co- ming was a worldwide killing virus. China still doesn’t need the US and virus it’s the best way to explain why do they avoid purchases. Kudlow said he didn't "wish China any ill whatsoever," but said the co- ronavirus could spur business investment in the U.S. The White House adviser said there could be a decrease in exports and production in China, particularly in the phar- maceutical sector, and "some things kind of in the middle when you get to automobiles and auto parts, but there is a lot we don't know." While China’s president has assured U.S. President Trump that trade agreement targets will be met despite the coronavirus, uncertainty prevails in the U.S. ag industry. In 2019, China purchased $16.3 billion of U.S. agricultu- ral products, up from $13.2 billion in 2018, which was an 11-year low. Last year, soybeans made up nearly half of all Chinese purchases, but it’s not those numbers that could satisfy the U.S. China bought protein in LatAm, where lo- cal currencies fall and made prices more attractive. “Unless the Chinese government is going to intervene and compel purchases of U.S. soybeans, we shouldn’t ex- pect a lot of exports of soybeans for the foreseeable future. Plus, seasonally, this is the time of the year when the U.S. soybean spigot gets turned off and the South American spigot gets turned on,” he says. Even if China half some tariffs, it doesn’t mean that they will buy. For now, they need only meat. In the end of 2019, China bought almost 1MMT wheat from Australia, Canada and France, and in January near 0,8MMT beans from Brazil. U.S. purchases near 0. U.S. Agriculture Secretary Sonny Perdue said to Reuters that the United States would have to be tolerant if the fast-spreading coronavirus impaired China’s ability to increase purchases of American farm products under the countries’ recently signed trade deal. In addition, Brazil has a large crop to sell and it is seeing a continued strengthening of the U.S. dollar vs. the real. The latest numbers show us 125MMT production in Bra- zil. More than expected, this volume pushing prices down. ARC Mercosul estimated the 2019/20 Brazilian soybean harvest last Friday at 15.7% compared to 27.3% last year 700+ Delegates 500+ Companies 50+ Countries X V I I I N T E R N A T I O N A L C O N F E R E N C E PREMIERE EVENT FOR THE GLOBAL LEADERS OF GRAIN AND OILSEED INDUSTRY NEW GLOBAL RULES OF 20’s April 22-23, 2020 INTERCONTINENTAL, KYIV, UKRAINE REGISTRATION www.ukragroconsult.com CONTACTS conference@ukragroconsult.org Tel/Fax +38 (044) 364 5585 GENERAL SPONSOR ORGANIZER SUPPORTED BY