Trade war between China and the US is not cooling down

The American president Trump was already not lacking in self-confidence, and after his performance in the Middle East, it certainly hasn't diminished. The summit in Alaska has been forgotten, and Trump wants to make a new effort to end the war between Russia and Ukraine. Trump's own trade war is meanwhile also putting China in a difficult position. The December contract for wheat on the Matif closed yesterday €2.25 lower at €187.75 per ton. On the Chicago exchange, wheat actually made a slight increase of 3¾ cents to $5.02½ per bushel. Corn closed up 5 cents, coming in at $4.21¾ per bushel. Soybeans also saw an increase with a rise of 4¼ cents to $10.10¾ per bushel. Egypt has bought two shipments of French wheat. This is at least what the press agency Reuters writes based on sources. For the wheat, Egypt pays $240 per ton FOB (delivered on board). This does not yet satisfy Egypt's hunger for wheat. The country is reportedly also looking to buy an undisclosed amount of wheat in the Black Sea region. PeacemakerTrump is becoming more involved in the Black Sea region on another front. Today (Friday, October 17), Ukrainian President Zelensky is visiting the Oval Office, as the office of the American president in the White House is called. The availability of American Tomahawk missiles will be a topic of discussion. Before the meeting with Zelensky, which is scheduled for today, Trump spoke with Putin yesterday. In a message on his own social media platform Truth Social, Trump referred to it as a 'very productive conversation'. President Putin congratulated me and the United States on the great achievement of peace in the Middle East, something that, he said, has been dreamed of for centuries. I truly believe that the success in the Middle East will contribute to our negotiations to end the war with Russia/Ukraine, Trump writes. Whether peace will actually come in the short term remains to be seen. By the way, Trump wants to have another meeting with Putin in fourteen days, probably taking place in Hungary. On the grain market, however, it seems to have little influence. The grain harvest is almost completed in Russia. According to Oksana Lut, the Russian Minister of Agriculture, 91% of the grain area has been harvested. The total harvest is estimated at 135 million tons, of which 90 million tons are wheat. According to Lut, Russia has the potential to export 50 million tons of grain. AsiaA customer that Russia can count on again is Indonesia. Due to disputes over access to the Indonesian market for Russian wheat, exports were halted for nine months. Only at the beginning of January did Russia export 123,000 tons of wheat to Indonesia. In 2024, Indonesia imported 1.3 million tons of grain (mainly wheat) from Russia. Indonesia, along with China and Egypt, is one of the largest buyers of wheat in the global market. To the south, in Australia, the relatively dry and warm weather is giving way to a more water-bringing weather type according to forecasters. In the southeastern provinces of Victoria and South Australia, only half of the average monthly rainfall fell last month. According to some local sources, wheat and canola have suffered a bit as a result. For the next fourteen days, rainfall amounts of 25 to 75 millimeters above average are predicted for Australia. Only in Western Australia will it remain drier than average. The rain comes just in time for the grains as kernel filling occurs around this time. Tap into stock or not?China and the US have maneuvered each other into a fairly difficult position. Trump's pressure tactics to have China buy soybeans in the US have not worked, and China's unwillingness means the country still needs to source a substantial volume from elsewhere to avoid depleting its inventory. According to analysts, China needs to secure 8 to 9 million tons of soybeans for December and January. Normally, this is the period when China makes purchases in the US. However, to put a dent in the US, China is primarily buying from South America. In recent weeks, Chinese buyers have been able to secure considerable volumes in Argentina. In Brazil, the largest soybean-producing country, exporters have placed a significant premium on soybeans. Growers are in the process of sowing soybeans for the new harvest (which is not going smoothly either), and there is not much incentive to sell according to local sources. Chinese buyers find a premium of around $3 per bushel compared to the CBoT quite excessive. The result could be that China is forced to draw from its own reserves.