Cash Strategist 2-2-22
Chinese import business, or the lack thereof, remains a driving factor in current world commodity price discovery. Chinese demand has been mixed all marketing year, which is causing wide price swings in the futures market. When China buys, U.S. futures prices rally. But as soon as China pulls back, futures retreat. This actually started at the end of the last marketing year and has carried over into the current one.
Last spring and summer, China was an active buyer of U.S. corn as South American production was uncertain. In a surprising move, even with lower crop sizes, Brazil and Argentina maintained their export programs.
Ukraine also produced a large corn crop last year, as did China itself, which further weighed on the U.S. market. U.S. corn sales remain elevated from expectations, but the reduction in recent demand is worrisome as we move forward. China has coverage in place through the spring months, which will put them close to another South...
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