The markets are down sharply this morning with corn off 7, soybeans off 16 and wheat off 12. The approaching harvest and weak outside markets have taken some of the wind out of the bulls sails. Rising COVID infection numbers in Europe and reports that the UK is preparing for another lockdown have soured the mood this AM.
The markets remain dependent on continued buying from China to maintain these price levels. Again this morning we have activity on the daily system with China stepping up to purchase 132 TMT of soybeans to go along with a sale to Pakistan for 132 TMT of soybeans and another sale for 171 TMT to Unknown.
Other non-Chinese demand is limited as end-users and importers appear unwilling to chase the market higher. Gulf premiums are running $1.32 over on corn and $1.36 over on soybeans. With US grain economically unattractive, all this means is that the Chinese demand will be a key driver for this week’s price action.
Harvest in the Delta is advancing with harvest in the Midwest kicking off later this week for many. Interior basis levels have begun to weaken. Chinese demand is the key going forward.
Have a Safe Day!