U.S. Crop Conditions
Corn crop ratings increased for the first time since early July to 64% good to excellent from 62% last week.
Significant gains in IL and MO were able to offset conditions in the northern Plains and MN which continued to deteriorate.
Corn has essentially finished silking at 95% and 56% is in the doughing stage compared to 51% average.
Bean ratings were unchanged last week at 60% good to excellent compared to 74% last year.
91% of the crop was blooming versus 89% average, and 72% was setting pods compared to 68% average and 73% last year.
Spring wheat conditions were up 1 point to 11% good to excellent, and harvest was 38% complete versus 17% last week and 21% average.
Winter wheat harvest was 95% complete, up from 91% last week and ahead of the 91% average.
Cotton conditions jumped up to 65% good to excellent from 60% previously, while 5% is setting bolls compared to 11% average.
FBN’s Take On What It Means: Rainfall last week wasn’t widespread, with several areas still left wanting as the heat in the northern Plains continues to deteriorating ratings. More rainfall is in the forecast this week, favoring the central and eastern Midwest, but is coupled with above normal temperatures across most of the region. It will be difficult to change corn yields much at this point, but more weather risk remains for the soy crop.
China’s Food Reserves to Increase
China's grain storage capacity currently exceeds 650 million tonnes, and is enough to meet more than one year of the country's consumption.
Sinograin is set to begin construction on 120 storage facility projects, totalling another 11 million tonnes of capacity.
Wheat and rice make up about 70% of China's state grain reserves, which are held both centrally and at local levels.
China's state corn reserves were estimated at around 200 million tonnes in 2017, but have decreased as the government sold off ageing grain.
Cofco sold over 56 million tonnes of corn from its reserves in 2020, but has sold just 192,000 tonnes of the 1.3 million offered in 2021.
In 2019, Cofco began to more than double the amount of meat purchased for the central reserves and buy about 115,000 tonnes in 2020 and 2021.
FBN’s Take On What It Means: While China’s purchases have seasonally stalled after getting off to a record start this marketing year, the demand has not gone away. China is set to be a large importer of foodstuffs for the foreseeable future which will likely continue underpin world prices.
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