A Reuters article published last week revealed that the Chinese farm consultancy agency Cofeed has suspended operations. The agency was a valuable source for information of Chinese grain and oilseed data used by several traders and analysts. The abrupt halt comes at time of heighted interest in Chinese demand. The article stated that several attempts to make contact with the company and others in the industry were unanswered. Police sealed doors at the address of business on April 29th.
In similar news, it was reported that the head of China-based analytical firm, Shanghai JC Intelligence Co. was jailed for reportedly divulging too much information on China’s corn needs.
The attempt to lower reliance on imported feed goods continues by Chinese officials and feeders. An article published this week reported that China’s leading pig producer, Muyuan Food Co. only used 9.8 percent soybean meal in its feed last year, reducing costs as feed prices skyrocketed. The lower percentage used by Muyuan, was half of the industry average of 18 percent. Fear is growing that others will follow the lower protein rations, decreasing the dependency on protein imports, specifically, soybean meal and corn.
Planting progress was again as expected last Monday. Corn planting improved 13% from the previous week to 80% complete. This was 2% ahead of this week a year ago and 12% ahead of the 5-year average. Corn emergence is at 41%, just 1% ahead of last year and 6% ahead of the 5-year average. Missouri has caught up with corn planting and now ahead of the 5-year average, leaving only Kansas 2% behind and Ohio 4% behind average. Soybean planting improved 19% for the week to 61% completed. This is now 10% ahead of the same week a year ago and 24% ahead of the 5-year average.
Reuters reported China wants to strengthen management of supply and demand by curbing unreasonable commodity price increases. China will make adjustments on trade and stockpiling of commodities on spot and futures markets. Commodities such as steel, iron ore and cooper have surged in price due to post-lockdown recoveries and easing liquidity globally. They plan to crack down on malicious trading and look into behaviors leading to bidding up prices.
The Brazilian firm Agroconsult updated their Brazilian corn production forecast. The firm slashed Brazil’s second corn crop by 15 percent from their March estimate. The safrinha crop is now estimated at 66.2 MMT versus the 78.3 MMT in March. Their total corn production is estimated at 91.1 MMT compared to the USDA’s latest estimate of 102 MMT. Brazil’s corn output has not been below 100 MMT since the 2017/2018 crop year. With the reduced crop, they expect exports 25 percent or 354 million bushels under the USDA’s May forecast.
China has been listed as a buyer of U.S. new crop corn in nine of the past 10 trading days. Total new crop purchases now total 423 million bushels compared to the five-year average for this time of year of around 100 million bushels. Analysts forecast of total Chinese purchases are widely variable with the range of 25 MMT to 40 MMT from all sources. Recent heavy rainfall in China has potentially reduced corn output, which could lead to higher imports as a result.
For more information, you may contact Kristi Guse at (712)-260-6486, or e-mail at email@example.com. The opinions and views expressed in this commentary are solely those of Kristi Guse. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.
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