Weather conditions remain good with drought areas receiving rain
Temperatures in agricultural areas were generally normal over the past week, with some areas being 1-2C higher than normal.
Most of the northern agricultural areas didn’t receive any rainfall over the past week, but this shouldn’t cause any issues with the winter wheat crop as soil moisture levels are sufficient.
Southeastern areas such as Hunan and Jiangxi finally received some rain last week after suffering from an extended drought. Rainfall in those regions ranged from 25-100mm which should help ease drought conditions somewhat and is positive for rapeseed production in those areas.
Weather conditions are expected to be positive for the next 10 days. Temperatures in most of the agricultural regions are expected to be slightly above average but soil moisture levels in those areas are sufficient. Southern China is also expected to receive more rainfall which should further ease drought conditions.
Soil moisture assessment (20cm) – November 22nd
Livestock and feed prices update
Futures in tight rangebound, palm oil futures bounce higher
Chinese agricultural futures traded in a tight range on Tuesday as traders continued to wait for a clearer trajectory of Covid policies in China that could decide the timing of a long-waited economic recovery and demand rebound.
Most contracts closed within the 1% range compared to previous close prices, but the No.2 (GMO) soybean contract on Dalian exchange rose 1.2% on the day due to short covering activities.
Traders were shorting the contract heavily in the past week as Argentina is expected to announce a new round of soybean export stimulus program which is likely to slap global soybean prices and boost cargo purchases from China.
Palm oil futures also bounced higher against the backdrop of weaker exports from Malaysia.