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One day wonder?

Agriculture.com Staff 04/09/2010 @ 8:51am

The corn market had one of the most exciting rallies Wednesday (up 12 cents at one time) since the January crop reports. It was based mostly on thoughts China would return to buying US corn.

This story has actually been brewing for awhile, with Chinese internal corn prices higher than what US corn shipped to southern Chinese ports would cost. Wednesday, the volumes of potential imports suddenly got larger (two million metric tons) and there was talk of potential buyers asking for import licenses.

Yesterday, as market participants chewed on the story, some realized the Chinese government could sell from their stockpiles. Also, there could be problems importing US GMO corn and some simply questioned the volumes. Finally, the Chinese government may be reluctant to do anything that would weaken internal corn prices. The government needs to encourage farmers to plant more corn.

The May USDA reports will be more interesting. In May, USDA analysts take the first stab at 2010-2011 supply/demand tables. There was a preliminary report issued at the February Outlook Conference, but this will be the first attempt using the March 31st acreage data and updated demand information.

Happy Planting!!

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.

The corn market had one of the most exciting rallies Wednesday (up 12 cents at one time) since the January crop reports. It was based mostly on thoughts China would return to buying US corn.

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