In the US futures market it was basically a session of technical trade centred around taking profit from a rally which basically started around mid-August. The fundamentals were not bearish, export data out of the states isn’t poor, it was simply profit taking time.
A few punters in the corn pit are now thinking that the Chinese corn crop may be a little worse off than Beijing is letting on. Thirty day rainfall data tends to confirm their thoughts with parts of the Heilongjiang and Jilin provinces seeing 150 – 250mm of rain in the last couple of weeks according to World Ag Weather. Combine this with the issues seen across the Henan and Hubei provinces a month or so back and you do tend to wonder if the reports of record wheat and corn production are fabricated (shock, horror).
Dalian corn futures were back a little yesterday, closing at Y2449 for the May 21 slot, US$361.11 / tonne. Working out plausible local sorghum numbers off that base price does tend to get one a little excited. Is that a new tariff I can smell.
Egypt continue to pick up wheat as prices remain relatively low. Egypt surprised the market when they became buyers midway through their own harvest earlier in the year. The response appears to be in regards to COVID19 and the desire to increase reserves to cover demand for at least 6 months. This has seen year on year purchases increased by 40% from 1.72mt last year to 2.4mt for the same period this marketing year. As in the past the main supplier is expected to remain Russia who has plenty of wheat to export in 2020-21.