Country News
Argentina: Martin Lopez, of the Buenos Aires Grain Exchange, says that rain could delay planting of the corn crop and unless there is drier weather soon it could threaten the forecasted record crop of 36 MMT. (Bloomberg)
Brazil: The corn crop is under some concerns of drought but it is too early to make substantive projections as to production losses. However, the situation does warrant caution when forecasting production for the 2016/17 crop year, especially since the safrinha crop would be primarily hit by any coming drought. The possibility of drought is eliciting caution in forecasts of Brazil’s production, which is not set to mildly decline year over year.
China: A government crackdown on overloaded trucks has caused a spike in demand for sorghum ($240/MT) and barley ($219/MT) from the U.S. and Australia. It has caused corn prices to rise 16 percent ($298/MT) since early October. (Note: U.S. corn to China is estimated at $181/MT C&F) A trucking priority is also being given to coal in advance of heating needs. Sorghum imports will be lower than last year but higher than expected this year. (Reuters) Note: China’s feed imports in October were down 46 percent from a year earlier but margins remain attractive.
China: Large grain stockpiles will enable the government to reduce the amount of land used in farming by 5 million hectares by 2020, according to Wu Xiao of the National Development and Reform Commission. The land will be diverted to grassland or environmental use and although it will reduce grain production by 75 MMT, that is only 2.5 percent of annual production. (Bloomberg)
China: More than 900 companies have applied for low tariff corn import permits in 2017. Corn imports could be 7.2 MMT in 2016/17. (Bloomberg)