Beijing wants the rest of the world to know that the most-populated country in the world is not looking at a grain shortage. China’s Ag Minister is blaming speculators for rapidly rising corn prices which are stoking fears about a possible shortage in the Asian nation.
Corn prices in China recently hit an eight-year high following events like typhoons and flooding that damaged the nation’s Corn Belt. The South China Morning Post says it saw firsthand that large areas of cropland were flattened. As a result, local farmers are concerned about a steep drop in what they can produce. Chinese corn imports, used mainly in animal feed, hit the highest level in almost 30 years during the first eight months of 2020, increasing anxiety about a possible domestic supply gap.
However, the nation’s Minister of Agriculture and Rural Affairs says the surging prices were caused by “market speculation and irrational hoarding.” He says the country has ample supplies of corn and is set to harvest another bumper crop in the autumn, despite the impact of natural disasters in two provinces that account for 25 percent of China’s corn production. “New corn will enter the market soon and the supply will further increase,” he says. “Corn prices are already starting to stabilize.”
Mike Zuzolo, Global Commodity Analytics, joins the Fontanelle Final Bell on a turn around Tuesday in the ag commodity markets. Zuzolo highlights that today’s pullback was bound to happen sooner rather than later. Still in the soybean complex it’s good to see the July contract holding the strong physiological level of ten dollars. Now the question becomes can the current run of Chinese demand and South American production workout to allow the rally to continue. Zuzolo also breaks down the current buys being made by China and how they compare in the big picture of the Phase One Trade Deal.
In the second half of the program Zuzolo talks funds in the ag commodities and livestock. Cattle may be starting to hit overbought levels despite the fact cattle seasonally are in a slump after the Labor Day holiday. The conversation ends on the importance African Swine Fever still has on the markets.
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Terry Branstad, U.S. Ambassador to China, will step down to work on the Donald Trump re-election campaign. Reuters reports sources familiar with the matter cite Branstad’s popularity in Iowa, having served there as governor for over two decades, as an asset to Trump. Branstad will resign and leave China early next month.
The resignation was first revealed on Twitter by Secretary of State Mike Pompeo. A spokesperson from China’s Foreign Affairs Ministry Monday stated, “We noted the tweet by the U.S. side and have not yet received notification about the end of Ambassador Branstad’s tenure.” The U.S. Embassy in China confirmed the resignation, however, stating, “The Ambassador confirmed his decision to President Trump by phone last week.”
In the statement, Branstad says, “I am proudest of our work in getting the Phase One trade deal and delivering tangible results for our communities back home.” Branstad was previously the longest-serving Governor of Iowa, a state that helped elect President Trump in 2016.
Wet weather moving through the Midwest
4.00 corn a ways out on the futures but what does that mean for corn
WASDE on Friday
3 typhoons hit China the past two weeks with damage to their corn crop.
Did you know China doesn’t buy corn from Brazil.
China continues to buy US beans
Reversal in the cattle market, restocking beef time
lean hog index above $60 first time since May 28th
Sam Hudson with Cornbelt Marketing joins the Fontanelle Final Bell as the markets get back to work after the Labor Day holiday. In the grains they essentially picked up where they left off last week. Soybeans notched their 11th consecutive higher close. The rally partially driven by strong Chinese demand. However Hudson is cautious to ride the Chinese demand bull to far because China has spoken for a lot of grain, but has not taken a lot of delivery yet.
Hudson also covers how the current moisture and cool temperatures could impact markets. Overall he expects the impact to be negligible as the moisture may be a little to late and frosty temperatures not too damaging.
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A major Australian barley exporter barred from China in the latest trade dispute to hit bilateral relations says the Chinese are only now acting on grain shipments dating back to 2019. China on Tuesday suspended barley imports from CBH Grain Pty. Ltd., Australia’s largest grain-exporting company, saying the grain was contaminated. But the delay in China’s response to a sanitary issue adds weight to suspicions that CBH is suffering collateral damage from political tensions, including a dispute over Australia’s call for an independent inquiry into Beijing’s handling of the coronavirus pandemic. CBH executive Jason Craig says the Chinese ban is over weed seeds in barley shipments to China dating back to December last year.
According to USDA data US Barley exports are up nearly 25% on the year. Last week USDA inspected 1,270 MT of US barley for export around the world.