October 14, 2020 | FBN Insights | Kevin McNew

Markets Mixed As Harvest Gains Momentum

Farmers continue to harvest beans over corn, due to stronger demand pull

Harvest Ahead of Average 

  • Corn crop conditions were 61% good to excellent, down slightly from 62% last week.
  • Corn harvesting was 41% complete compared to 39% expected and 32% average.
  • In the last soybean crop condition report the crop was rated 63% good to excellent, down from 64% last week, and ended above 54% last year.
  • Soybean harvest was 61% complete vs 59% expected, and well ahead of the 42% average.
  • Winter wheat planting was 68% complete compared with 61% last year, and ahead of the 61% average.
  • Upland cotton crop conditions were unchanged from last week at 40% good to excellent, while harvest was 26% complete compared to 27% average.

FBN’s Take On What It Means: Farmers continue to harvest beans over corn, due to the stronger demand pull and firm nearby cash prices. Corn and bean harvest were both ahead of expectations with Illinois and Iowa especially moving quickly. The dry forecast should allow most areas to continue to move quickly, and harvest should finish ahead of schedule over the next 2-3 weeks. 

China Corn Futures Hit Record High

  • On Wednesday, corn futures in China hit a record high $380.70 per tonne.
  • Two key things are impacting corn supplies: adverse weather (typhoons) and efforts made by China to reduce its corn stock supplies in recent years.
  • Corn cash prices throughout the country have risen.
  • New-crop cash prices are 30% higher versus recent years according to some in the industry.
  • China has a TRQ set at 7.2 million tonnes but already the major consumer has about 10 MMT of US corn on the books.
  • Plus, historically, China buys corn from Ukraine.   

FBN’s Take On What It Means: The shortness of corn supplies in China is supportive of feed prices. Even though China has started harvesting corn, its interior cash corn prices keep rising. The US has been the primary beneficiary for now. There is much speculation on whether and/or how much China will raise its import quotas, but there has been no confirmation from the government.  

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