By Brady Sidwell
Howdy market watchers. A perfect storm of factors drove grain markets to new, multi-year highs this week. Several days of freezing temps in U.S. and French winter wheat areas; continued dryness threatening Brazil safrinha corn; suspension of Brazilian import duties on soybeans, corn, meal and oil; rumored China buying of U.S. wheat and corn and late week purchases of soybeans; cold soil temps in the U.S. corn belt delaying planting and emergence; a weaker U.S. dollar; fund buying; and spot market feed demand on fire combined to fuel corn and wheat futures.
As soybean shipments from Brazil declined due to rain delays and logistics issues, it was reported this week that China imported 320% more beans from the U.S. in the month of March. The outlook for China’s feed grains and protein appetite have been clouded by uncertainty around growth, the spread of African swine fever and geopolitical tensions across the Taiwan Straits. While China’s corn import estimates this year continue to rise — now seen at 28 million metric tons (MMT) from USDA’s official 24 MMT forecast — the USDA attaché in Beijing lowered China’s corn imports next year to 15 MMT, as well as wheat due to increased domestic production announced by the Chinese government.
If it were up to market forces alone, China would import the majority of its corn with production costs…