AgDealer, Canada’s largest used farm equipment shopper publication and online listing platform, announced a partnership Tuesday with OFX Group, an Australian-based online currency exchange provider.

Farmers, distributors and buyers outside of Canada “will have the opportunity to assist their equipment purchases found on AgDealer.com using the services of OFX currency exchange,” AgDealer publisher Glacier FarmMedia, the owner of this website, said in a release.

OFX offers currency conversion resources for farmers and equipment buyers “that are lower in cost compared to banks,” GFM said.

“We are excited to offer more resources for equipment buyers outside of Canada. By partnering with OFX, AgDealer.com users can quickly access easy to use and low-cost currency conversion through the click of a button,” Nathan Mitchell, GFM’s vice-president for listings, said in Tuesday’s release.

Cross-border shipments of used farm equipment are becoming more common, he said, “especially with the current U.S. and Canadian dollar exchange rates.”

Buyers worldwide using the AgDealer site will be able to make cross-border payments using any of more 55 currencies supported by OFX, Glacier said.

“With the fluctuations between the Canadian and U.S. dollar, the partnership between OFX and AgDealer gives farmers, dealers and distributors the ability to purchase farm equipment from Canada and save money on the exchange rate compared to using a bank,” Alfred Nader, OFX’s president for North America, said in the same release.

AgDealer and its French-language counterpart, Agricole Ideal, have been part of what’s now the GFM group of publications and websites since 2010. — Glacier FarmMedia Network

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Despite the two countries’ diplomatic row, China has sharply picked up its purchases of U.S. soybeans.

Georgy pointed to the 715,000 tonnes purchased by China on Wednesday — plus the 211,300 tonnes said to be for unknown destinations, but with China being the likely the buyer. These are in addition to the several hundred thousand tonnes purchased by China over the last week, which buoyed soybean prices at the Chicago Board of Trade (CBOT).

However, he was pessimistic about China being able to fulfill its obligations under the Phase One trade agreement to acquire US$40 billion in U.S. agricultural goods in 2020. Despite China’s recent flurry of purchases, the markets widely believe the country remains well back of meeting its target amount.

“What we’re seeing is we’re getting good purchases,” Georgy said. “It’s better than what it’s been, but we also have to remember that beans out of the U.S. are now cheaper than beans out of South America.”

In the latest tit-for-tat row between the U.S. and China, the U.S. State Department ordered China to close its consulate in Houston, Texas. The reason was said to be human rights violations, but reports on Wednesday stated the consulate was allegedly used for espionage purposes.

In turn, China countered with ordering the U.S. to shutter its consulate in Wuhan, the city in which the first reported cases of COVID-19 emerged.

“This kind of shows the uncertainty in our governments. We expect things are getting better, but showing that things might be getting worse,” Georgy said, citing concern that the U.S./China spat “could escalate rather quickly.”

The situation really has yet to spill over into CBOT in any strong fashion, he noted.

With the U.S. Department of Agriculture (USDA) preparing to issue its next monthly supply and demand report on Aug. 12, Georgy suggested the department could be in something of a bind when it comes to corn yields.

Recent precipitation across the U.S. Corn Belt has boosted crop development, with markets believing previous yield estimates will still come to fruition rather than decline. USDA pegged corn yields for 2020 at 178.5 bushels per acre.

“It’s going to be tough for the USDA to change anything for corn,” he said.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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Large-volume state purchases of U.S. corn and cotton have also been put on hold, one of the sources said.

China could expand the order to include additional U.S. farm goods if Washington took further action, the people said.

“China has asked main state firms to suspend large scale purchases of major U.S. farm products like soybeans and pork, in response to U.S. reaction to Hong Kong,” the source said.

“Now we will watch and see what the U.S. does next.”

U.S. President Donald Trump said on Friday he was directing his administration to begin the process of eliminating special treatment for Hong Kong, ranging from extradition treatment to export controls, in response to China’s plans to impose new security legislation in the territory.

China is ready to halt imports of more agriculture products from the United States if Washington takes more action on Hong Kong, the sources said.

Chinese importers have cancelled 10,000 to 20,000 tonnes of American pork shipments — equivalent to roughly one week’s orders in recent months — following Trump’s comments on Friday, the source said.

State purchases of bulk volumes of U.S. corn and cotton have also been suspended but the details were not clear.

In a worst case scenario, if Trump continues to target China, Beijing will have to scrap the Phase One trade deal, a second source familiar with the government plan said.

“There’s no way Beijing can buy goods from the U.S. when receiving constant attacks from Trump,” the person said.

China pledged to buy an additional $32 billion worth of U.S. agriculture products over two years above a baseline based on 2017 figures, under the initial trade deal the two countries signed in January (all figures US$).

China has bought soybeans, corn, wheat and soyoil from the United States this year, to fulfil its commitment under the trade deal. Beijing also stepped up purchases of U.S. pork, after the deadly African swine fever decimated its pig herd.

The U.S. Department of Agriculture reported that China bought $1.028 billion worth of soybeans and $691 million of pork in the first quarter of 2020.

Private importers haven’t received a government order to suspend buying of U.S. farm produce, according to a third source with a major trading house, but commercial buyers are very cautious at the moment, the person added.

“A certain scale of trade will be halted,” given rising tensions between China and the U.S. in other areas, but it is not a full stop, said a fourth source familiar with government plan.

However, China would be able to find other sellers easily (of the farm products), he added.

The sources all declined to be named due to the sensitivity of the matter.

— Reporting by Hallie Gu, Jing Xu in Beijing and Keith Zhai in Singapore; additional reporting by Dominique Patton and Gavin Maguire.

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The U.S. Agriculture Department is partnering with regional and local distributors to purchase $3 billion in such farm goods to be distributed to food banks, churches and aid groups as millions of Americans face unemployment with much of the economy shut down.

“American agriculture has been hard-hit, like most of America, with the coronavirus, and President Trump is standing with our farmers and all Americans to make sure that we all get through this national emergency,” Agriculture Secretary Sonny Perdue said at a White House news conference.

The agency said it will make monthly purchases totaling about $100 million each of fresh produce, dairy products and meat products. Perdue said USDA will work with companies such as Sysco to help procure, package and distribute food boxes.

Long lines have formed at U.S. food banks in recent weeks.

Farmers and ranchers have struggled to get their goods to market because of disruption caused by the pandemic, forcing some to throw out food and call for government help.

“Having to dump milk or plow under vegetables ready to market is not only financially distressing but it’s heartbreaking as well for those that produce them,” Perdue said.

Direct payments will be sent “as quickly as possible” as farm commodity producers have experienced “unprecedented losses,” Perdue said, who hoped checks could be sent by the end of May.

The $16 billion in direct payments to farmers and ranchers will include $9.6 billion for the livestock industry — with $5.1 billion for cattle, $2.9 billion for dairy and $1.6 billion for hogs, according to a statement released late Friday by U.S. Senator John Hoeven of North Dakota, chairman of the Senate agriculture appropriations committee.

In addition, $3.9 billion will be paid to row crop producers, $2.1 billion for specialty crop farmers and $500 million for other crops, according to the statement. The payments are capped at $250,000 per individual farmer or entity.

The Renewable Fuels Association (RFA), which represents corn-based ethanol producers that have suffered due to lack of demand for motor fuels as Americans stay home, was quick to criticize the package.

“USDA missed a crucial opportunity to lend a helping hand to an industry that is suffering the worst economic crisis in its history,” RFA president Geoff Cooper said in a statement.

Perdue acknowledged that constituents may consider the direct payments “insufficient” and said USDA is trying to cover “small farmers as well as larger farmers.”

Funding for the immediate aid program will be pulled together from a number of sources, including recent coronavirus-related aid laws passed by Congress and other funding authorities that USDA has access to, according to Perdue.

But going forward, he said, “I anticipate we will need additional money.”

— Reporting for Reuters by P.J. Huffstutter and Karl Plume; additional reporting by Steve Holland, Makini Brice and Humeyra Pamuk in Washington.

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“I personally think the markets… are holding up pretty well with all of the negative news,” said Scott Capinegro of Barrington Commodities in Barrington, Ill.

Some progress was made in U.S./China trade, he said, as the two countries’ Phase One trade deal officially came into effect Saturday. Three days later, China announced tariff exemptions for almost 700 U.S. imports that included soybeans, corn and wheat. China said it will begin accepting applications for one-year exemptions beginning March 2.

“It’s good, positive news coming out of China that they’re not going to sit on their hands,” Capinegro said, but noted China recently purchased corn from Ukraine and continues to buy soybeans from Brazil.

He stressed that China has yet to begin massive purchases of U.S. agricultural products as outlined in Phase One, but the tariff exemptions were a good step.

China’s COVID-19 outbreak certainly “screwed things up,” he added.

“They’re trying to show their commitment to the Phase One deal, but yet they haven’t stepped into buying as much as people thought they would be already. But it’s early yet.”

The U.S. is facing the additional dilemma of the Brazilian real (23 U.S. cents) hitting new lows as the U.S. dollar (4.36 reais) gains strength.

“That always makes Brazil’s products look cheaper,” the trader said.

Domestically, record amounts with the soybean crush have put pressure on soyoil. For soyoil to turn around, it needs to see gains in soymeal, Capinegro said.

Despite all of these issues, he noted the corn basis has remained firm and the soybean basis is regaining strength.

“There is something underneath this market that’s happening.”

Until then, the U.S. Department of Agriculture holds its Agricultural Outlook Forum on Thursday and Friday in Arlington, Va., and he believes the crop outlooks to be released there will put pressure on the markets.

Also, options for the March contract expire on Friday.

— Glen Hallick reports for MarketsFarm from Winnipeg.

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At the beginning of 2019, Farm Credit Canada (FCC) reported farmland values across Canada increased by an average of 6.6 per cent during the previous year.

But that’s not the main driver of fixed costs, according to Dave Sullivan, chief operations officer of Global Ag Risk Solutions, pointing instead to machinery.

“We make those choices as farmers every day,” Sullivan explained at Keystone Agriculture Producers’ annual general meeting in Winnipeg.

“It’s within our control, not the market,” he said. “Those decisions drive our costs much more than the cost of land.”

Sullivan predicted that machinery purchases will decrease in years to come.

“We’ll see this trend of fixed costs flatten out,” he said, adding that farm profitability has “sucked the working capital” out of agriculture in Western Canada.

One notable trend is that equipment purchases have slowed down in recent years. Combine sales are down by as much as 27 per cent.

FCC expects to release its report on 2019 Canadian farmland values this spring.

— Marlo Glass reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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The hearing is to determine whether Meng will be extradited to the U.S., which requested her arrest by Canadian authorities in December 2018. China, in the wake of that arrest, detained two Canadians on allegations of spying and halted most of its imports of Canadian canola seed.

Should the Huawei chief financial officer end up being released to go home to China, one trader believes canola markets won’t see the effects right away.

Ken Ball of PI Financial in Winnipeg said it’s very likely that China would hold off from buying larger quantities of canola in the immediate aftermath.

“China has a history of doing what’s in their best interests, not ours,” he stated.

Ball pointed to China’s recent inaction in purchasing large quantities of U.S. soybeans after signing the Phase One trade agreement last week.

“China is obviously hanging back in the wings. Because that’s the way they get the best market impact,” Ball said.

He believes there could be a reasonable chance that Meng may not be extradited to the U.S., where she’s facing charges relating to violating sanctions against Iran.

Meng’s defence has argued the crime she’s alleged to have committed is not illegal in Canada. For someone to be extradited, the principle of double criminality must apply: the alleged crime must be illegal both in the country seeking extradition and the country holding the accused.

However, Crown prosecutors have argued that the Huawei chief financial officer isn’t charged with violating U.S. sanctions against Iran; rather, she is charged with bank fraud. Prosecutors have accused Meng of lying to international bankers about Huawei’s business dealings in Iran.

Although China has not completely banned canola imports from Canada, they have certainly been substantially reduced, as data from the Canadian Grain Commission (CGC) show.

As of November, canola exports to China in the 2019-20 marketing year amounted to 473,100 tonnes — a 71 per cent drop from 2018-19.

However, Canada’s total canola exports as Jan. 12 for 2019-20 were at 4.02 million tonnes, about 8.8 per cent off the previous year’s pace.

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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Beijing and Washington have portrayed their “Phase One” agreement as a momentous step after months of start-stop talks punctuated by tit-for-tat tariffs that uprooted supply chains and stoked fears of a further slowdown in the global economy.

“Together we are righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families,” U.S. President Donald Trump said as he touted the deal in rambling, partisan remarks at the White House alongside Chinese Vice-Premier Liu He and other officials.

The centrepiece of the deal is a pledge by China to purchase at least an additional $200 billion worth of U.S. farm products and other goods and services over two years, over a baseline of $186 billion in purchases in 2017 (all figures US$).

The deal would include $50 billion in additional orders for U.S. agricultural products, Trump said, adding he was confident that U.S. farmers would be able to meet the greater demand. He also said China would buy $40 billion to $50 billion in additional U.S. services, $75 billion more in manufacturing goods, and $50 billion more worth of energy supplies.

Officials from both countries have touted the deal as ushering in a new era for U.S.-Sino relations, but it fails to address many of the structural differences that led the Trump administration to start the trade war in the first place.

They include Beijing’s long-standing practice of propping up state-owned companies, and flooding international markets with low-priced goods.

Trump, who has embraced an “America First” policy aimed at rebalancing global trade in favour of U.S. companies and workers, said China had pledged action to confront the problem of pirated or counterfeited goods, and that the deal included strong protection of intellectual property rights.

Earlier, top White House economic adviser Larry Kudlow told Fox News the agreement would add 0.5 percentage point to U.S. gross domestic product growth in both 2020 and 2021.

But some analysts have expressed skepticism it will set U.S.-China trade on a new trajectory.

“I find a radical shift in Chinese spending unlikely. I have low expectations for meeting stated goals,” said Jim Paulsen, chief investment strategist at Leuthold Group in Minneapolis. “But I do think the whole negotiation has moved the football forward for both the U.S. and China.”

The Phase One deal, reached in December, canceled planned U.S. tariffs on Chinese-made cellphones, toys and laptop computers and halved the tariff rate to 7.5 per cent on about $120 billion worth of other Chinese goods, including flat panel televisions, Bluetooth headphones and footwear.

But it will leave in place 25 per cent tariffs on a vast, $250 billion array of Chinese industrial goods and components used by U.S. manufacturers.

Trump, who has been touting the Phase One deal as a pillar of his 2020 re-election campaign said he would agree to remove the remaining tariffs once the two sides had negotiated a “Phase Two” agreement. He added that those negotiations would start soon.

He also said he would visit China in the not-too-distant future.

— Reporting for Reuters by David Lawder and Andrea Shalal; additional reporting by Lisa Lambert and Susan Heavey in Washington, Tim Aeppel in New York, and Se Young Lee and Stella Qui in Beijing; writing by Heather Timmons.

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The two men were picked up separately in December 2018, shortly after police in Vancouver held Huawei Technologies chief financial officer Meng Wanzhou on a U.S. arrest warrant. The two Canadians face state security charges.

Trudeau said Canada has been working with Washington in a bid to convince China to release the two men: businessman Michael Spavor and former diplomat Michael Kovrig.

“We have said that the United States should not sign a final and complete agreement with China that does not settle the question of Meng Wanzhou and the two Canadians,” Trudeau told Quebec television station TVA.

It was unclear whether Trudeau was referring to the so-called ‘Phase One’ deal between China and the United States, which has yet to be signed, or a more complete agreement.

U.S. Treasury Secretary Steven Mnuchin said on Thursday that the two sides would sign the Phase One trade pact, which calls for U.S. farm product exports to China to double over the next two years, at the beginning of January.

Joseph Crook, a spokesman for the U.S. embassy in Ottawa, said Washington was deeply concerned by the arrest of the two Canadians.

“President Trump and other senior officials have called for the release of the two detained Canadians in meetings with the highest levels of the Chinese government,” he said by email.

— Kelsey Johnson reports for Reuters from Ottawa.

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Even with a so-called ‘Phase One’ trade pact expected to be signed in January, uncertainty over Chinese purchases of U.S. farm products — specifically what goods China has agreed to buy, in what volumes and which timeframes — means that some of the profound trade changes that have occurred during the past 18 months are at risk of becoming permanent, they said.

“It’s difficult to believe that we can just rewind the clock, and everything goes back to where we were before,” said John Griffith, senior vice-president of CHS’s global grain marketing and renewable fuels, told Reuters in an interview Thursday.

Such uncertainty is fueling agony across a U.S. farm sector that has suffered from years of falling farm incomes, low crop prices and a glut of grain.

Griffith said while President Donald Trump and one of the largest buyers of U.S. farm goods have been battling it out with tariffs, the map of how foodstuffs flow around the planet has changed.

“New customer connections have been made on the face of the planet, new infrastructure improvements have been made,” he said.

CHS has been more acutely impacted by the U.S.-China trade war than many of its agribusiness rivals because the company’s operations are concentrated in northern Midwest and Plains states such as North Dakota, which ships the bulk of its soybeans to Pacific Northwest terminals for export to China.

“We won’t go immediately back to where we were 18 months ago, maybe not for a long time,” CHS CEO Jay Debertin told grain producers at a farm conference in North Dakota last week.

“The profound trade changes resulted in new trading partners and new sources of grain for markets the U.S. once served,” Debertin said. “That is now the new world.”

U.S. Treasury Secretary Steven Mnuchin said on Thursday the United States and China would sign their ‘Phase One’ trade pact at the beginning of January, adding that it was completely finished and just undergoing a technical “scrub.”

— Reporting for Reuters by P.J. Huffstutter and Karl Plume in Chicago.

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