China Buys More U.S. Corn
Two days in a row this week the USDA announced a daily corn sale of just over 1 Million Metric Ton (MMT) of corn was sold to China. Just to put it in perspective 1 MMT of corn is around 40 million bushels. So, in 2 days China bought over 80 million bushel of U.S. corn. Before those announcements China had already booked 20 MMT of U.S. corn. That means this marketing year so far China has purchased around 900 million bushels of U.S. corn.
It was disappointing that each day this week after the USDA announcement in the morning corn future prices did not go up. In fact they were under pressure and traded lower? The bears argue that it was "already in the market" of course they always say that about bullish news don't they? There is another old phrase in the grain markets that I have seen analysts write about this week which is the bull market is over when bullish news does not make the market go higher.
There is a lot of truth in that old phrase and the reverse too, you know the bear market is over when bearish news does not make the market go lower. So, is the bull market over? That is possible however, I have also seen the market not respond to bullish news for many days. Then, all at once with no bullish news the market gaps higher and is off to the races!
There are a lot of unknowns that the market is dealing with right now. How big will the bean crop be in Brazil and Argentina. The second crop of corn in Brazil is being planted very late because of wet weather and the slow soybean harvest. Then on March 31, 2021 the USDA releases the Perspective Plantings and the Stocks Report. Then what will the growing season be like here in the United States?