Arlan Suderman Chief Economist with Stone X joins the Fontanelle Final Bell midweek following a big day of data. At the top of the data pile was the August WASDE report, which to some surprise corn and soybeans were able to make gains following the report. Suderman recaps the data and why the trade may now be moving on from a supply story to a demand story. Suderman is key to point out though that USDA may be getting a little too generous with their export and feed use projections for corn.
Suderman in the first segment also addresses the derecho wind event that caused damage to as much as ten million acres of crops in Iowa. Suderman’s estimates on the potential yield loss from the storm are wide and have carried a lot of criticism and support on social media.
The final portion of the Fontanelle Final Bell focuses on China and what it means for US exports that China is currently driving a hard line story of self sufficiency.
Major export business this week
Battle between good weather and crops
Is there inflationary concern with the dollar?
Record prices in China…how short are they on food?
Little boy that called woof.
Dairy price update
Thursday markets were mixed from the outside equities to the commodities. China made a historic purchase of corn at 1,937,000 Metric Tons for the 2020/2021 marketing year. Jeff Peterson with Heartland Farm Partners believes this shows that Chinese demand is strong and will likely continue barring issues between the worlds largest economies. However the trade is still focused on how big the US crop will likely be and is cautious to shake loose short positions.
Peterson also highlights how important currencies are currently to the market. The US Dollar index has continued to decline, but that is partly due to a quickly rising Euro. The US Dollar in comparison to emerging currencies like the Real and Ruble is still relatively strong. That means that the biggest competition to US ag commodities still has some competitiveness issues.
Hear the whole conversation here:
Mike Zuzolo, Global Commodity Analytics, joins the Fontanelle Final Bell after a mixed Tuesday trade. Grains all moved lower following the latest crop progress update from NASS. Zuzolo is still looking at dry conditions in Illinois, Iowa, Ohio and Michigan. So far rains have been beneficial and timely, but the latest forecast models show that dry conditions could continue to persist and the corn belt may miss it’s next timely rain.
Aside from the supply side of the equation there is still more demand to draw up. In the second segment of Final Bell Zuzolo reveals his latest data on China and the flooding they are experiencing. This actually translates into not only demand for grains, but protein as well. Zuzolo wraps up the market commentary with a look at the cattle market and what it means for the board to continue running premium to the futures.
Listen to the full episode here:
Tensions with U.S. & China
BUT we keep seeing export sales to them & unknown
Weather has become a non factor at this point for crops
Softer ethanol margins
Weaker dollar and the wheat market
Beans giving up the fight to stay positive
Demand for proteins
China & a somber note with the Consultant in Houston
China did and another make purchases of soybeans
Cash trade Chinese buyers looking at corn & wheat
Growing amount of evidence their temp reserve is almost empty
Gasoline consumption took another drop
Restaurants continue to shut down after reopening
Authorities in central China have blasted a dam to release surging waters behind it amid widespread flooding across the country that has claimed scores of lives. State broadcaster CCTV reported the dam on the Chuhe River in Anhui province was destroyed with explosives early on Sunday morning, after which the water level was expected to drop by more than 2 feet. Water levels on many rivers, including the mighty Yangtze, have been unusually high this year because of torrential rains. Blasting dams and embankments to discharge from water was an extreme response employed during China’s worst floods in recent years in 1998, when more than 2,000 people died and almost 3 million homes were destroyed.
The flooding is also impacting crop lands in the region. This has some commodity market analysts pointing towards a reason China has been aggressively buying commodities recently. Last week China made one of the largest corn purchases on record from the US (1,762,000 MT for delivery in the 2020/2021 marketing year).
From weather to more buys from China, this weeks grains had two main players. This week’s Trading Bits & Bytes features Darin Fessler with Lakefront Futures.
Wheat market caught fire
China is rumored to be involved with the wheat, soybeans & maybe a bit of the corn
WHY isn’t corn getting excited about the sales to China
Weather in the U.S. & the Black Sea Region
Outlook for Brazil on corn & soybeans
COVID Vaccine might have helped to lift the cattle market
JBS & COVID concerns
Still have a lot of supplies
A Reuters report says China made the biggest purchase of U.S. corn in history on Tuesday. It’s the second massive deal that China has made for corn in less than a week.
The Asian nation made the buy in an attempt to meet its commitments in the Phase One trade deal with the U.S., even as tensions rise between Washington, D.C., and China. The USDA says private exporters report that China bought 1.76 million tons of corn for shipment during the 2020-2021 marketing year that starts on September 1st.
The sale passed the previous record of a one-day corn sale to China that totaled 1.45 million tons in December of 1994. The deal followed a sale of 1.365 million tons to China on July 10th, a deal that was spread out over two marketing years.
Last week, China increased its corn and soybean import forecasts for the current season as the country expects to step up its agricultural purchases from the United States. China also booked deals to buy 129,000 tons of soybeans in the 2020-2021 marketing year. Beijing agreed to buy $80 billion worth of U.S. ag products over the next two years in the Phase One trade deal between the two countries.