Bloomberg writers Kim Chipman and Breanna T Bradham reported on Thursday that, “Corn extended its ascent to the highest in almost eight years, leading a rally in crop futures on bets that voracious Chinese demand, rebounding economies and adverse weather will leave silos depleted.
“Corn jumped by the exchange limit, with wheat following and soybeans topping $15 a bushel for the first time since 2014. Cold and drought in some regions are stoking concern there won’t be enough grain and oilseed to satisfy China’s massive need for livestock feed or to meet growing biofuel demand as the world economy recovers from the virus pandemic.”
AGRICULTURE MARKETS: Soybeans prices have jumped above $15 a bushel for the first time since 2014. Corn has surged also to a fresh 8-year high, almost touching $6.5 a bushel. And wheat is approaching $7 per bushel, setting its highest since 2014 | #OATT 🌽🌾🌿
“Corn futures in Chicago rose as much as 4.1% to $6.315 a bushel, the highest since May 2013. Benchmark wheat in Chicago gained 5.3% to $7.105, the highest settlement price in almost seven years,” the Bloomberg article said.
China has already started buying U.S. corn from the harvest that farmers will start gathering in the fall, in the latest sign of tight global supplies.
“The Asian nation, the world’s largest commodity importer, bought American corn for shipment in the fourth quarter, according to people familiar with the matter who asked not to be identified because the deals are private. Crops for the fall harvest are currently just being planted and traders estimate sales to China were at least 1 million metric tons.”
The Bloomberg article added that, “China is forecast to import 28 million tons from all countries in the 2020-2021 season, the USDA’s Being office said in a report this week. While purchases are expected to drop to 15 million tons the following year, it’s still double a quota set by the World Trade Organization that allows firms in China to import the grain at a lower duty rate.”
In addition, Reuters writers Gus Trompiz and Michael Hogan reported on Thursday that, “Chinese buyers are thought to have booked at least half a million tonnes from the next French wheat harvest, as China looks widely to cover grain import needs heightened by a domestic corn deficit, traders said.
“The sales were believed to be the first confirmed deals involving the 2021 crop and suggest China will remain a major outlet for French wheat for a third consecutive season.”
“The push to enroll more land into the 36-year-old Conservation Reserve Program is a part of the administration’s campaign to counter climate change.”
Polansek and Plume noted that, “Still, farmers said the potential for big profits from crop production will make them reluctant to take land out of production. U.S. corn and soy futures notched fresh multi-year highs on the Chicago Board of Trade on Thursday.
‘Unless you’ve got some really tough soil like in southern Illinois – roll-y, rocky ground – you’re going to have a hard time getting anybody to sign up anything for CRP,’ said Dave Kestel, who grows corn and soybeans in Manhattan, Illinois.
“The National Grain & Feed Association, which represents grain processors and exporters, warned the USDA not to try to enroll large tracts of productive farmland into the conservation program because the voracious international demand for commodities would simply lead farmers in competing exporting countries to increase plantings.”
Keith Good is the social media manager for the farmdoc project at the University of Illinois. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily FarmPolicy.com News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.
Donnelle Eller reported on the front page of today's Des Moines Register that, "This year's planting season is about as unusual as Blake Reynolds can recall: Snow, rain and cold meant he started planting corn and soybeans this year in…