There have been rumors of China making big buys of U.S. soybeans. Now, it’s confirmed.
USDA reported a flash sale of 720,000 metric tons, which adds up to more than 26.5 million bushels. USDA also said last week’s soybean sales were up 36% from the prior four-week average, with China buying 337,000 metric tons.
The Thursday announcement helped pull up the commodity markets a bit on a day when Wall Street took a nose-dive because of renewed concerns about the future of the economy and a possible second wave of COVID-19 cases.
Yet, analysts are still looking at corn.
“We aren’t talking about $4 corn without a weather problem, but we are talking [about] a little firmer of an environment than we’ve been seeing over the last month and a half,” says Alan Brugler, president of Brugler Marketing and Management.
Pro Farmer reports corn export sales of 660,700 MT for 2019/20 and 25,900 MT for 2020/21, which are within expectations based on Thursday’s weekly update. Pro Farmer says a continued rebound in ethanol production helped support corn prices this week.
“We were anticipating the worst of the worst and now things turned around a little bit,” Brugler says. “Ethanol use is picking up week over week.”
However, analysts say exports also depend on the strength of the U.S. dollar and other currencies.
“Exports are benefitting from the stronger real. The Brazilians aren’t really a factor in the market like they were,” Brugler explains.
“Corn farmers aren’t only battling big fundamentals from the U.S. side but they’re battling high acreage from the other countries as well,” says John Payne, publisher of This Week In Grains. “To get that to stop, you have to see this dollar break a little bit.”
The U.S. dollar is “flying its own flag” compared with other currencies, he adds.
“You have to be very, very careful here marketing corn,” Payne says. “For beans, we can have the same fundamentals and be at $10. We just need some of the other currencies to cooperate.”