Markets - General
China’s appetite for new crop corn is now sitting in uncharted waters. China has committed to purchasing 321.2 million bushels, or 8.15 million metric tons, since May 10, and analysts say there are two main drivers.
For the week of May 17, corn was higher and soybeans were down hard along with wheat, meal, canola and soy oil. There has been good opportunities to sell cash and avoid the futures exposure.
Corn and soybean prices saw pressure on Monday as recent rains in the Midwest weighed on the market. Wheat futures also traded lower, falling to the lowest level in more than a month.
The commodity markets finished the month of May with more volatility. As the market is greeted by June next week, analysts say weather will start having an even bigger impact on prices.
USDA’s report this week showed 76% of the U.S. corn crop is rated good to excellent, 2 points better than last year. The ratings are causing confusion for farmers seeing struggling crop stands due to weather extremes.
U.S. soybean oil futures rallied to a record high on Monday, with tight supplies in focus due to strong demand from the biofuel sector as drivers return to roads following COVID-19 related shutdowns.
The London Metal Exchange has abandoned proposals to close its open outcry trading floor, the last such venue in Europe, it said on Tuesday, but added it believes electronic trading is the future.
A Brazilian agribusiness consultancy announced a new forecast reduction for the country’s second corn crop because of a severe drought, adding that yields are expected to touch a five-year low this season.
USDA is set to release its latest WASDE report Thursday. Analysts say the June WASDE report typically isn’t the biggest market moving report for the month, but think there are key changes that need to be made.
USDA’s June World Agricultural Supply and Demand Estimates (WASDE) amplified the major themes driving the corn market: Demand is strong, supplies are questionable.