The Chinese government announced last year a 10-percent ethanol blend mandate effective in 2020. The move brought encouragement to corn and ethanol makers elsewhere in the world since China’s huge corn stocks keep global prices depressed. However, now Wu Tianlong of the quasi-governmental Rural Economy Research Center says corn stocks have fallen so low that there isn’t the corn to meet the mandate and so it will be adjusted. Wu says that state stockpiles of corn have fallen to 56 MMT over the past two years, a 72 percent reduction from the 200 MMT in 2017. However, that does not account for China’s actual total supply and USDA’s research only finds a 7.5 percent reduction in corn carryover stocks. Moreo...
What You Need to Know Today: After a period of limited activity, USDA reported a sizeable 613 KMT in soybean export sales, including 330 KMT to China and 283 KMT to unknown destinations, potentially also China. The purchases represent a meaningful pickup in demand and bring China closer to ful...
Inflation is back in the driver’s seat, and agriculture is getting pulled in two directions. A stronger dollar is pressuring grains despite fresh Chinese buying, while renewed Middle East attacks lift crude oil. Higher energy prices can support commodities, but they also raise expenses an...
From WPI Consulting
Communicating importance of value-added products
Facing increasing pressure to quantify the value of export promotion efforts to investors, a U.S. industry organization retained WPI to develop a quantitative model that better communicated the importance of exports. The resulting model concluded that value-added meat exports contributed $0.45 cents per bushel to the price of corn, increasing support for that sector’s financial support of WPI’s client. In addition to serving the red meat industry with this type of analysis, WPI has generated similar deliverables for the U.S. soybean and poultry/egg industries.