China dominated market headlines last week. Despite a tense start to the first U.S.-China meeting under the Biden administration, China completed its largest weekly buy of corn since January. The weekly total came to 153 million bushels.
As the buys from China kept pouring in, the market reaction was muted.
“It’s a very similar response to what we saw in January,” says Matt Bennett of AgMarket.Net. “We come in here and you get these huge export sales announcements, and then market opens up, everyone’s expecting that you’re going to get a really nice little rally going, and then we gave all those gains back very quickly on Thursday.”
Bennett and Standard Grain’s Joe Vaclavik agrees it was a standard market reaction, where traders buy the rumor and sell the fact. But Bennett says some rains are helping the western Corn Belt, as well as some favorable weather in South America have also helped aid the selling of the market.
So, with a possible improving weather scenario in South America, and some rains to help ease the dryness concerns in the U.S., is the top of the market in?
“I don’t know if I can necessarily say that,” says Vaclavik. “We have got a lot of news forthcoming that could in fact push prices higher. You have an acreage report that could be bullish or bearish. You’re going to have another USDA monthly crop production and WASDE report in April, and USDA may very well go and raise these export numbers for both crops.”
Vaclavik says by the time the April report rolls around, spring planting will also be underway.
“So, by then, we could be talking planting weather, and you could get into some sort of issue there,” Vaclavik adds. “So no, I don’t think it’s necessarily safe to say that the markets have topped. I’d say that we’ve seen more of like a consolidation-type pattern here as of late.”
Related Stories:
Politics or Real Demand: What’s Driving China’s Buys Right Now?
