Sep 28, 2021

China Buying Australian Wheat

Markets mixed with harvest pressure, energy higher

US Crop Progress Report as of September 26

  • The US Crop Progress Report showed corn harvest continues slightly ahead of average with 18% now in the bins.

  • The corn crop continues to mature ahead of pace, 74% mature versus 64% average.

  • Soybean harvest is also slightly ahead of average, 16% versus 13%, though behind last year.

  • 75% of soybeans are now dropping leaves versus 66% average.

  • There was no change in corn and soybean conditions; 59% G/E for corn and 58% for soybeans.

  • Winter wheat plantings also make good progress and are at 34% done, versus 32% average.

  • Sorghum harvest is 31% done, mostly in line with average.

  • Cotton harvest continues to lag a bit due to weather; it’s at 11% done and 60% have bolls opening.

FBN’s Take On What It Means: Corn and soybean harvests continue slightly ahead of average. Weekend weather was conducive to fieldwork, and the coming week should largely continue that trend. Many winter wheat areas have a good chance for rain this week, but a number of areas will be missed and will warrant monitoring for dryness that could affect establishment.

FBN
FBN

China Begrudgingly Buying Australian Wheat

  • China has bought about two million tonnes of Australian wheat so far this crop year, about 40% of what farmers have sold so far.

  • The buying comes as Australia is expecting a second consecutive bumper crop and amid US white wheat production concerns.

  • Also, other world producers are seeing production hits from adverse weather and droughts.

  • China and Australia have a long-running trade dispute, which has seen anti-dumping duties on and cancelled purchases of Australian commodities.

FBN’s Take On What It Means: According to USDA, China is forecasted to produce 137 million tonnes of wheat, but consumption is estimated at 149 million. With the U.S., Russia, Canada, and others seeing dramatic production cuts due to poor weather, Australia is one of the few remaining world players that China is able to turn to. There is some posturing from the bitter trade relations, but globally tight stocks are proving a stronger motivation for China.

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Kevin McNew

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Magazine

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