This week farmers, market analysts and traders alike were fixated on a rumor that China was going to buy 3 million metric tons of corn. Putting that into perspective, there’s only been two times in history that the Chinese bought more than 3 million metric tons in one marketing year, 1994-1995 and 2011-2012. While analysts were skeptical of the purchase, the markets reacted. One analyst says these kind of demand rumors won’t improve corn prices. Weather must be the driver.
While it’s still unclear where this week’s rumor originated, John Payne, editor and publisher of the This Week in Grain and Oilseeds newsletter, thinks members of the Trump Administration are leaking this info.
“I think there's a lot of high-level people that are involved in these negotiations that have their own kind of media leaks,” Payne told U.S. Farm Report host Tyne Morgan. “It seems that's crossed up with the traditional ag media.”
How do the rumors work? Well, a “report” comes out that there’s buying happening, so that demand pushes the markets. But then there aren’t any Foreign Ag Sales (FAS) reports and no flash sales to report, according to Payne. He says Thursday there was concrete evidence of Chinese purchases of Milo, but nothing confirmed for corn.
“I think long run here it's a weather story to get corn moving,” Payne says. “I don't see it coming from the demand side unless China would really come in double or triple what they're talking about.”