U.S. grains: Corn ends flat after vaulting to 7-1/2 year high

Corn sales to China spurred climb

CBOT March 2021 corn with 20-, 50- and 100-day moving averages. (Barchart)

Chicago | Reuters — U.S. corn futures settled nearly flat on Thursday after a volatile session in which the benchmark contract hit its highest level in 7-1/2 years, buoyed by U.S. corn sales to China, only to retreat on profit-taking, traders said.

Soybean and wheat futures closed lower in technical trade, despite concerns about tightening global supplies of grains and oilseeds.

“The bull market is strong and it remains intact, and you can’t get overly worked up about a day like today. This is just run-of-the-mill volatility in a market like this,” said Joe Vaclavik, president of Standard Grain.

Chicago Board of Trade March corn settled up 1/2 cent at $5.34-1/2 per bushel, after rising to $5.50-1/2, the highest price on a continuous chart of the most-active corn contract since June 2013 (all figures US$). Prices dipped lower at times before ending nearly unchanged.

CBOT March soybeans ended down 21-1/2 cents at $13.53-1/4 per bushel and March wheat fell 11-1/4 cents to finish at $6.47 a bushel.

Corn futures vaulted higher after the U.S. Department of Agriculture confirmed private sales of 1.7 million tonnes of U.S. corn to China, plus 213,600 tonnes to unknown destinations.

The announcement followed confirmation of two million tonnes more in U.S. corn sales to China earlier this week.

Given the sales pace, analysts are looking ahead to USDA’s monthly world agricultural supply and demand estimates (WASDE) report due Feb. 9 and considering whether the government will raise its export forecasts, potentially tightening inventories.

USDA on Jan. 12 cut its estimate of U.S. corn exports for the 2020-21 marketing year that began Sept. 1, 2020.

“It is becoming increasingly obvious that the USDA was caught going in the wrong direction on (corn) exports this month,” ED+F Man Capital analyst Charlie Sernatinger wrote in a note to clients.

Soybean futures fell but were underpinned by export demand and worries about rainfall hampering the harvest in Brazil.

Harvesting delays should continue throughout February, Thaís Italiani, market intelligence co-ordinator at Hedgepoint Global Markets, told a webinar. But the firm still estimates Brazil’s soybean crop at a record-high 132 million tonnes.

Commodity funds hold net long positions in both CBOT corn and soybean futures, leaving the markets prone to bouts of long liquidation.

— Reporting for Reuters by Julie Ingwersen in Chicago; additional reporting by Gus Trompiz in Paris and Mai Nguyen in Hanoi.

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