The Weekender

April 27

Weekend(er) Teaser

Crazy changes in just a few years' time!

Can you identify the dark blue and green bars on this chart?

Hint: it’s biofuel related

(Answer below)

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Week in Review

Headline Fatigue

I am by no means suggesting you read all of these… in fact, I am not suggesting you read any of them.

The headlines below are just a sampling of the stories that have circulated in recent days, only amplifying the existing confusion and uncertainty:

China tells Trump: If you want trade talks, cancel tariffs -BBC

White House Considers Slashing China Tariffs to De-Escalate Trade War -WSJ

China denies any suggestion it is currently in talks with the US over tariffs -AP

Conflicting US-China talks statements add to global trade confusion -Reuters

China eases some US tariffs as Trump says he wants concessions -Yahoo Finance

Speaking of uncertainty, it’s understandably off the chart:

The similarities between Trade War 1.0 and 2.0 are uncanny.

In both years, China announced retaliatory tariffs against US soybeans on April 4. Plus, both SX18 and SX25 settled at $10.35 on April 25.

Remember, futures didn’t really start to fall apart in 2018 until the summer when tariffs went into effect, trade tensions escalated, Brazil’s record crop was realized, and the US was growing a record soybean crop in the field.

July beans closed 11 cents higher on the week, trading above 1060 for the first time since the end of February.

Fun fact: Year-to-date nearby beans have gained 25 cents (+4%) while futures in Brazilian real have lost more than 50 cents (-5%) when accounting for the real’s near-9% appreciation against the dollar since Jan 1.

The BRL gained 2.2% vs the dollar last week:

The dollar’s weakness has been a boon for the Euro, which is up nearly 10% (vs the USD) year-to-date and is helping keep US grains and oilseeds competitive:

Speaking of Europe - U.S. beans remain competitive to non-China destinations:

U.S. corn also remains competitive in export markets: