Bulls regain control of the market in a decisive way today! The buying started first as the Chinese markets opened quite firm and technical buy stops were hit across the board for corn, beans and wheat.
This week’s exports suggest corn is slowing down but soybeans are still full steam ahead. As I’ve reported several times, it’s all about getting equilibrium between U.S. and Chinese markets. With domestic prices more than $7.50 for corn and close to $16 for beans, incentive has existed to buy U.S. product. The estimated shipping cost from the Midwest to China is estimated around $3 a bushel. This implies $5 U.S. corn is going to start rationing China’s future export need but $11 beans still is unpriced by $2.