Sep 15, 2021

Cash Markets Firm as Exports Slowly Recover

China cuts forecast for feed-use corn

China Cuts Forecast for Feed Use Corn

  • China’s agriculture ministry lowered its 2021/22 forecasts of corn use for animal feed by three million tonnes to 187 million.

  • The 2020/21 estimates for feed use were also lowered by two million tonnes to 180 million.

  • Chinese hog prices have fallen this year on increased supplies and fresh fears from new ASF outbreaks.

  • Herd expansion is slowing, curbing feed consumption growth; alternative feeds (e.g. wheat and rice) have had a price advantage as well.

  • However, the ministry raised its estimates of corn imports by four million tonnes to 26 million, which now is in line with USDA’s estimates.

FBN’s Take On What It Means: China has stepped up price support mechanisms for hog producers, but they have had minimal effects on slowing the reductions in herd size or ASF outbreaks. Prices have continued to stay at low levels. Nevertheless, the country is still forecast to import much more corn than normal, particularly from the U.S., and to provide price support for the grain. Right now, USDA sees China’s corn stocks building for the 2021/22 crop year.


India Cuts Import Taxes on Vegetable Oils

  • India cut the base import tax on crude palm oil to 2.5% from 10%; crude soybean oil and sunflower oil had base rates cut to 2.5% from 7.5%.

  • Refined grades of the three oils were also cut to 32.5% from 37.5%.

  • India, the world’s largest vegetable oil buyer, lowered the taxes in an attempt to cool near-record price increases; the country meets two-thirds of its demand through imports.

  • The tax cut should help cut prices and boost consumption ahead of key festivals.

  • However, import taxes on crude rapeseed oil were kept intact.

FBN’s Take On What It Means: While soybean oil has seen a price drop as of late, prices are still near recent highs. The Indian tax cut may help keep prices somewhat elevated, but it is not an overly bullish signal and the markets responded modestly. With no changes to the rapeseed rate, canola received no support from the news.

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Kevin McNew

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Marketwatch: Oct, 24

cmdty National Corn Price Idx: ZCPAUS.CM

open: 5.1374
high: 5.1867
low: 5.1249
close: 5.1668

cmdty National Soybean Price Idx: ZSPAUS.CM

open: 11.801
high: 11.861
low: 11.7324
close: 11.7679

cmdty National Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.4043
high: 7.5443
low: 7.3993
close: 7.5365

cmdty National Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 6.9986
high: 7.0999
low: 6.9861
close: 7.0671