China Buys U.S. Corn?
It was very disappointing Thursday when the corn market dropped double digits. We got through a very bearish USDA Report the previous Friday where corn traded sharply lower but by the close came back to close a little higher. The Phase 1 Trade Deal with China was signed Wednesday so why did the corn market drop so hard the next day? Was it "buy the rumor sell the fact" or did the funds just decide to sell?
I read the funds sold 40,000 corn contracts Thursday only to get blown out Friday when there were rumors China bought 2 to 4 cargos of U.S. Corn out of the Pacific Northwest. In the big picture that is not a lot of corn but it may have been a sign of more buying in the future. Plus, maybe buying more soybeans, ethanol or DDG's?
It was a tough week for soybeans as beans lost around 16 cents. Beans did hold support at the 200 day moving average. It is not unusual for soybeans to see weakness at this time of the year. The early planted beans in South America are already being harvested. China and the rest of the world know that the second big crop of beans will soon be available to the market.