New futures option; Covid guide on ag products; US sales to China

Dalian Commodity Exchange looks to launch new soy options

Dalian Commodity Exchange announced it was soliciting market opinions on the launch of options on the soybean oil, No.1 soybean, and No.2 soybean futures contract. No. 1 soybean futures are domestically produced non-GMO soybeans, while the No. 2 contract is for imported GMO soybeans.

Currently, the DCE has options on 8 commodity futures. For agriculture this includes corn, soybean meal, and palm olein. Other products with options include iron ore, liquefied petroleum gas, polyethylene, and polypropylene.

Options on agricultural futures on the DCE have seen in an increase in volume over the past year. In March, corn options traded 4.3 million contracts, palm olein options hit a new record of 3.3 million options, and soybean meal options volume hit 6.3 million contracts.

Relative to international contracts, DCE’s futures are relatively smaller, with a contract representing 10 metric tons. However, as the industry develops there is increasing adoption of more sophisticated risk management products.

Government issues new guide to ensure crop production

China’s Ministry of Agriculture and the CDC have co-issued a new guide to greenlight the logistics of agricultural inputs and movement of farmers during the current wave of Covid lockdowns.

The new guide highlighted that a wide range of agricultural products including fertilizer, pesticide and animal feed will be granted a top priority when it comes to transportation, loading and inspections.

There should not be any restriction on the transportation of these products, the document emphasized.

Other staple goods such as vegetables, fruit, meat and dairy products have also been given a greenlight to bypass Covid-related transport restrictions.

Furthermore, local governments are forbidden to prevent farmers from accessing their farmland because of Covid restrictions.

Local authorities in some areas of Jilin province in northeastern China blocked farmers to plant and fertilize their crops as the province entered a full lockdown last month, raising concerns of corn, soybean, and rice output this year.

Chinese buying of 21/22 US corn steady, soybean demand jumps

Net export sales of 2021/22 corn crop from the US to China during the week of April 8-14 ticked marginally higher week on week to 675,200 tons, according to USDA data.

But 2022/23 new crop sales to China slid to 340,000 tons during the same week, down 17% from the week before.

As China continued to snap up corn from the US, sorghum purchases slowed significantly to 11,400 tons last week, which was 92% lower than the previous week.

For US soybeans, demand for both 2021/22 and 2022/23 crops improved noticeably. More than 496,000 tons of current US soybean crop were sold to China last week, up 14% on the week.

Net sales of 2022/23 new crop to China last week soared 150% from the previous week to 669,000 tons.