Dec 10, 2020

Markets Higher Across the Board Before USDA Report

China reports little change in crop production

Ukraine Exports Lower

  • The economy ministry reported the 2020 grain crop could decrease to 65 million tonnes from a record 75 million tonnes in 2019.
  • Ukraine’s grain exports are 22.3 million tonnes through the first five months of the 2020-21 marketing year, down 15% from 26.3 million last year.
  • 6.1 million tonnes of corn have been exported, down from 8.6 million last year.
  • Wheat exports have declined from 13.8 million tonnes to 12.1 million tonnes.
  • The country has used nearly 70% of its wheat export quota for the 2020-21 marketing year.
  • The ministry also reported that Ukrainian farmers had sown 8.06 million hectares of winter grain for the 2021 harvest.98% of the expected area.
  • It included 6.1 million hectares of wheat and 954,700 hectares of barley.

FBN’s Take On What It Means For The Farmer: Ukraine accounted for about 16% of global grain exports and shipped approximately 57 million tonnes of grain in 2019/20. However, a severe drought has led to a decline in this year’s crop, and is expected to continue limiting exportable supplies. While wheat exports are only slightly behind last year’s pace, corn shipments are lagging behind further. This has helped push China’s increased import demand for corn to the US and supports prices.


China Reports Little Change In Crop Production

  • China’s National Bureau of Statistics reported production of 260.67 million tonnes of corn in 2020, compared to 260.77 million last year.
  • The small change comes despite any affect from three typhoons on crops in parts of the country's northeastern corn belt.
  • Many private analysts have projected corn production would decrease as much as 10 million tonnes.
  • Wheat production was estimated at 134.25 million tonnes, up slightly from 133.6 million last year.
  • Rice production rose 1.1% to 212 million tonnes after a 5% increase in planted area of the crop.
  • Soybeans production increased 8.3% to 19.6 million tonnes.
  • The total grain planted area increased 0.6% to 116.8 million hectares.

FBN’s Take On What It Means For The Farmer: China’s government estimate of the corn crop appears to be rather optimistic. With little change in planted area or yield from last year, it would seem likely the shortfall will be larger. Anticipation of a larger deficit in corn stocks has led to record imports of corn, increased purchase of other grains, and resulted in prices at multi-year highs.

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Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014