Authorities in central China have blasted a dam to release surging waters behind it amid widespread flooding across the country that has claimed scores of lives. State broadcaster CCTV reported the dam on the Chuhe River in Anhui province was destroyed with explosives early on Sunday morning, after which the water level was expected to drop by more than 2 feet. Water levels on many rivers, including the mighty Yangtze, have been unusually high this year because of torrential rains. Blasting dams and embankments to discharge from water was an extreme response employed during China’s worst floods in recent years in 1998, when more than 2,000 people died and almost 3 million homes were destroyed.
The flooding is also impacting crop lands in the region. This has some commodity market analysts pointing towards a reason China has been aggressively buying commodities recently. Last week China made one of the largest corn purchases on record from the US (1,762,000 MT for delivery in the 2020/2021 marketing year).
Kyle Bumsted, Allendale Inc, joins the Fontanelle Final Bell from a dirt road near Ericson Nebraska. The market discussion centers around livestock. Heat is not only taking it’s toll on the row crops, but it also impacting cattle. This could help to decrease carcass weights. Which have been on the rise since the pandemic caused a backlog of fed cattle. Heat also discourages grilling though. As Bumsted says in the program, “Not many people want to stand in 100+ degree weather and grill a steak.” That creates the question of, where will demand fall going through the rest of summer? Bumsted believes that there will be plenty of meat coming to the market and this may put pressure back on the futures.
Bumsted has also been closely watching spreads and seasonal trends in the livestock markets. His research shows that feeders have a tendency to trend higher though the end of July into August. This happens to parallel when many large video auctions are also occurring.
Grains are not left out of the conversation. In the second half of the Fontanelle Final Bell, Bumsted looks at the technical and weather pattern driving the grain trade.
You can catch the full episode uninterrupted here: