Grain Exchange – Volatile Update Boosts Market
China will issue low tariff rate quotas for 9.36 mmt of wheat, 7.2 mmt of corn, 5.4 mmt of rice, and 894 tmt of cotton for 2020, according to their National Development and Reform Commission. These are the same amounts as last year. Taiwan signed a non-binding letter of intent to buy 66.1 million bushels of wheat from Idaho between 2020 and 2021. USDA announced yesterday morning the sale of 120 tmt of corn to Mexico.
Yesterday morning started out with rumors of China looking for beans off the PNW supporting prices until the report at 11:00 AM came out and prices took off. A surprisingly bullish corn stocks number in yesterday’s report came in 314 MBU below estimates while bean stocks were also far enough below estimates (69 MBU) to help support their early trade news inspired gains. With the USDA miscounting stocks for the last 6-months they are confirming why basis is running at record highs.
These crop condition numbers came out at 3:00PM yesterday. Corn harvest 11% vs. 19% avg. and 14% estimated, conditions unchanged at 57% good/excellent, dented 88% vs. 98% avg., mature 43% vs. 73% avg., bean harvest 7% vs.20% avg. and 6% estimated, conditions improved 1% to 55% good/excellent, dropping leaves 55% vs. 76% avg., winter wheat planted 39% vs. 38% avg., winter wheat emerged 11% vs. 13% avg.
As yesterday’s market move proved, always having open offers in place can help take advantage of an unexpected volatile market after a report. Give your Grain Marketing Specialist a call to put your orders in place prior to the next USDA report due out on the 10th of October.