Markets are unchanged in corn and up 2 in soybeans to start the day. The volume of trading was down from the previous two overnight sessions as concerns over crop yields fades and traders look to bank some profits from the recent rally. Chinese demand is a must for the price levels to hold.
China has been actively booking corn out of the US over the last two weeks. Based on the size of the purchases the past two days it suggests that it is Sinograin/COFCO rather than individual buyers. Exporters report that the corn is being sold for February/March shipment out of the Gulf. Unfortunately this appears to come at the expense of the soybeans which has seen their pace slow. The review of the Phase 1 trade deal now has passed with all parties agreeing that China is working to fulfill its pledge. China already has large volumes of corn and soy purchased through December.
After letting the duty-free ethanol imports from the US expire yesterday, Brazil and the US have tentatively worked out a deal to extend the duty-free imports for another 90 days. No new demand is expected as the margins are currently negative to import US ethanol, but the deal buys the Brazilians time to see who wins the election as well.
Informa is expected to release their corn and soy estimates this morning.
Historical charts and trends tell us that the market has put in its high and we could start to slide into late October before we will see a bounce.
Producers should continue to make new crop sales at current levels for any space needs as harvest pressure will be working its way north in the coming weeks.
Have a Safe Day!