Chicago Board of Trade Market News
Outlook
China’s grain output is set to exceed a record 700 million metric tons this year, a key agriculture ministry official said on Friday. That figure is 0.7% higher than the 2023 harvest of 695.41 million tons, data from the National Bureau of Statistics showed. Although highly reliant on imports from Brazil and the United States to feed a population of 1.4 billion, the world’s largest grains producer has stepped up investments in farm machinery and seed technology in recent years in its quest for food security. Soybean stocks remain dependent on imports and corn planting in China is still falling short of requirements.
In the Black Sea area, Russian President Putin is reportedly examining Black Sea shipping proposals put forth by Turkey’s president Erdogan. Putin and Erdogan met at the BRICS summit in the Russian city of Kazan. Erdogan told reporters that he had discussed the grain corridor with Russia.
Ukraine’s new system of minimum export prices for the country’s key grain and oilseed shipments is likely to be operational at the beginning of December, Ukrainian agriculture minister Vitaliy Koval said on Wednesday. He told Reuters that a small number of regulatory acts are still needed for the final introduction of the system.
The government launched the plan to tackle price distortions linked to the war with Russia, which has seen an increase in domestic cash purchases of some agricultural products and their subsequent export at artificially low prices to avoid taxes. The cabinet has already approved the procedure for setting minimum prices.
The new mechanism will apply to shipments of wheat, corn, sunflower oil, soybeans, rapeseed and some other agricultural commodities, which remain Ukraine’s biggest source of external revenues. In line with the new rules, minimum permissible export prices will be calculated on the basis of state customs service data, taking into account the terms of delivery for the previous month and using a 10% discount. Ukraine is a major grain grower and exporter globally and has shipped abroad 14.1 million metric tons of various grains so far during the current 2024/25 July-June season, official data showed.
U.S. exporters last week sold unusually large volumes of corn that previously were possible only when China was active in the market. But China was absent this time around, and its import intentions remain unclear for now. However, the recent flurry of export sales reflect plentiful, cheap U.S. corn supplies that should help the United States easily retain its title as top exporter in 2024-25.
In the week ended Oct. 17, U.S. corn export sales totaled a whopping 4.18 million metric tons (164.7 million bushels), slightly edging all trade estimates. In the last couple of decades, only four other weeks featured larger totals, all in early 2021. Those four weeks all boasted sales to China well above 3 million tons, though last week’s volume included just 10,000 tons to China, representing a fraction of a cargo. Essentially, China has yet to explicitly participate in the 2024-25 U.S. corn market.
Last week’s corn sales relied heavily on a single 1.6 million-ton allocation to Mexico, split between 2024-25 and 2025-26. However, a comparably large sale to Mexico is typically observed every year around this time, so the Mexican sale does not fully explain the weekly anomaly. Mexico has about 10 million tons of U.S. corn booked for 2024-25, easily a record for the date. Japan’s U.S. corn bookings are at four-year highs, and USDA on Thursday announced the first daily sale of U.S. corn to Japan since February, totaling 227,600 tons.