Weekly breakdown
Poor weather supports corn prices
Corn prices in China were relatively stable to end the week with only marginal declines in a few regions. Logistics were complicated by extremely heavy fog in northern China which led to a quieter cash market to end the week.
China’s national meteorological service issued an orange weather alerts for heavy fog, the second most severe warning, as conditions reduced visibility to below 200 meters, with some areas reporting visibility of less than 50 meters.
State auctions continue with thin volume
Henan province has recently held some wheat reserve auctions. There was a total of 212,000 metric tons auctioned and all of this was purchased by the market.
The price for 2018 and 2019 reserve wheat was at 2800 yuan per ton (US$440 per ton) while the more recent 2020 crop went for 2970 yuan per ton (US$467 per ton). Wheat prices have stabilized at a high level over the past week.
There haven’t been any recent large-scale national auctions recently which has meant the volume of wheat circulating in the market has been relatively small. Therefore, prices have been relatively stable as traders and buyers take a wait-and-see approach.
Wheat, rapeseed condition worsens, high temperature in focus
Winter wheat crop conditions declined slightly this week with the portion of the crop rated in excellent or very good condition falling 3% to 21%, in line with the rating during the same period last year.
Rapeseed conditions also fell with 9% of the crop rated excellent or very good which is down from 15% at this point last year.
Weather conditions in northeast China saw temperatures 2-6 degrees C higher. Over the past 10 days most of the region saw temperatures 2-6 degrees higher than normal and some areas of Inner Mongolia experienced temperatures anomalies exceeding 6 degrees.
This warmer temperature could further damage high-moisture corn being stored in the region. Over the next the weekend, temperatures are expected to drop with some areas of the northeast seeing drops of 10-14 degrees.
US weekly net export sales to China
China booked over 202,000 tons of US corn during the week ending December 2, ranked the third largest corn buyer during the week trailing Canada (258,400 tons) and Colombia (244,800 tons).
Chinese purchase accounted for nearly 18% of total US corn sales in that week.
During the week, there had been 136,700 tons of US corn shipped to China.
China was the only net buyer of US sorghum that week, snapping up 370,100 tons, of which 55,000 tons were switched from unknown destinations. Meanwhile, the US exported 175,500 tons of the crop to China during the same week.
For soybeans, China contracted 893,400 tons last week and almost half of which was switched from other countries and regions. China’s share accounted for more than 54% of total US soybean sales that week.
US soybean exports to China during the week exceeded 1.47 million tons.