The USDA announced the sale of 300,000 Metric Tons of US corn to China this morning. This was the first sizeable sale of US corn to China in years! There have been smaller US corn sales that have had to be GMO approved by the China Gov’t. Today’s purchase possibly confirms that US non-tariff barriers related to US GMO corn strains have been removed. The sale is rumored for late April and early May – a nearby position which is an old crop surprise.
Its also rumored that China is still asking/working additional US corn. No commercial comment is available on any new tonnages. It appears that China maybe willing to secure US corn as US Trade negotiators head for Beijing this weekend. China wants to be seen as keeping its pledges/promises on US Ag purchases to be a trusted partner. The hope could be to prod the Trump Administration to consider lifting US tariffs? the big question moving forward will be to see if the Chinese purchase of 300,000 Metric Tons is a one-off event with exporters suggesting China asking for offers of US ethanol /DDGs ?
Technically May corn has run up against the 50-day moving average at $380.2 which is where temporary selling pressure emerged today heading into April option expiration. The 100-day moving average sits at 383. This is the first weekly close above a downward weekly trendline in some time designated by the blue arrow on the weekly continuous chart. If we stay above this line, which to me is major support coming in next week at 375, I think the market pushes past 383, to test 389 and possibly 401.
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