Dim Sums: Agricultural Markets in China

Rising prices in China's corn market signal the transition from glut to seller's market, according to some analysts in China. The market has been filling its corn deficit by drawing down a stockpile over the past four years, but the stockpile is expected by many to be depleted in 2020. Over 15.9 million metric tons of corn was sold at four weekly auctions of "temporary reserve" corn held between May 28 and June 18, 2020--nearly all of the corn offered. Premium prices were paid, with the average price rising from 1765 yuan per metric ton in the first auction to 1884 yuan in the June 18 auction. The auctions are the main source of corn now that farmers have sold nearly all of their surplus corn from last fall's crop. The auctions are replicating similar frenzied conditions that prevailed during corn auctions 11 years ago when fiscal stimulus to prod China out of the 2008-09 recession leaked into some commodity markets. Authorities have upped deposit requirements...

China is completing one of the biggest wheat harvests ever this month. China doesn't need all that wheat, and the government is expected to purchase a significant chunk of the crop to prop up the price and keep its farmers happy. Official news media reports that the summer grain harvest is 90 percent complete. "Summer grain" consists mainly of wheat that was planted last fall, stayed in the ground through the winter and is ready for harvest in early summer. Agriculture Minister Han Changfu estimates that yield is up this year and the proportion of "quality" wheat is up 2.8 percentage points, despite drought in some areas, warm winter temperatures, and worries about covid impacts on field management. Han says various levels of government spent 160 million yuan ($22.9 million) to prevent wheat scab, rust, and pest damage to the crop. China Grain Net estimates that the wheat crop will be about 2 percent larger than in the last 10 years, but not as big as in 2...

Chinese leaders pacified the urban citizenry by turning them into an army of real estate tycoons and landlords--precisely the class of people who were shot en masse when the communist party seized control of the country 70 years ago. Thirty years on from June 4, 1989, wealth generated by expensive concrete cubes stacked into the sky on state-owned land and financed by state-owned banks has proven to be an effective balm for taming a restive population. In April, the Peoples Bank of China released a financial survey of 30,000 urban households conducted in 2019. A summary of the results by 21st Century Business News showed that the average urban family in China had assets of 3.179 million yuan (about $454,000), debt of 512,000 yuan ($73,000), and a fat net worth of  2.89 million yuan ($381,000). Source: Peoples Bank of China 2019 urban family financial survey. The average asset value of $454,000 for urban Chinese families is not that far behind the U.S. average of $792,000 (...