Wheat condition better YoY; Peanut futures hit 2-wk high

Winter wheat conditions better than last year on good weather

Temperatures across China were 2-6C higher than normal over the past week while major precipitation was generally confined to the southeast and ranged from 25-100mm. Much of the rest of the country, including the winter wheat areas, received light rains of 1-10mm which is beneficial to soil moisture but didn’t cause any waterlogging in fields.

While winter wheat conditions remain good, rapeseed continues to face challenges. Much of the Yangtze River region had heavy cloud cover over the past week which slowed the development of rapeseed.

Over the next week, conditions for winter wheat remain positive with small rainfall expected in the northern winter wheat growing area. Conditions should also improve for rapeseed in the southeast as conditions are expected to be drier following recent rains.

Anhui province also reports that winter wheat conditions are better than in previous and similar to more normal years. The portion of the crop rated first-class, or the best, is at 52.9% which is 6.3% higher than last year. The portion rated third-class, or the worst, is just 8.5%.

Grains and fertilizer prices update

Peanut futures hit two-week high amid soybean expansion plan

Peanut futures in China continued to rally strongly on Tuesday with the main contract reaching the highest point in two weeks against the backdrop of the government’s plan to boost soybean output in 2023.

The main contract on Dalian Commodity Exchange (DCE) jumped nearly 2% intraday.

“Everything traded up,” said one China-based trader when commenting on oilseed futures.

“Soybean will compete for land,” the same trader added.

China’s central government outlined its plan for soybean output expansion in 2023 on Tuesday. Analysts and traders expected the plan will eventually cut planting areas for corn and rice.

Moreover, peanut cash prices in China have also been trading higher due to low inventory in production regions and crushers are willing to raise their bids.

Futures close