Another day and more rumors of China eliminating tariffs on additional bean purchases from the US. Yesterday’s rumor suggested that China was going to allow an additional 5 mmt of beans to ship tariff free thru January. Illinois Governors’ office Tuesday released statement saying a letter of intent was signed by the Taiwan Feed Industry Association and the Illinois Corn Marketing Board for $2.2 billion in corn, corn product and soybean purchases over the next two years. Corn purchases are expected at 5.0 mln mt, corn product purchases at 500,000 mt and soybean purchases between 2.5 to 2.9 mln mt over 2020-2021 period. The problem with both of these “rumors” is that there has been no follow thru. A lack of confirmation of Chinas bean purchases and negative comments from President Trump on the trade war at yesterday’s UN summit have the markets stagnant to lower today.
Harvest delays in the west and northern areas due to rains could add premium to the market in the coming week. Traders are focusing on the Stocks report Monday. Next Monday the USDA will release its September 1st quarterly stocks report. Estimates are for 2.43 billion bushel in corn which compares to 2.14 in 2018.
With the funds short 162k corn contracts we could see some short covering in the next couple days ahead of month end.
Have a Safe Day!