Corn Follows Wheat Prices Higher; Soybeans Lead the Phase 1 Deal Purchase
– Cbot corn has been following wheat higher, with worrisome northern hemisphere planting weather pushing up the wheat/corn spread. Funds have stretched the long positions on wheat.
– Corn loadings remained lackluster ex South America and Ukraine, while US stood to benefit, although loadings in recent weeks stayed range bound. With higher than normal % of the USDA estimated corn exports sold, it suggests the US corn exports could be underestimated by the USDA. So far, we have not witnessed US corn loadings to Brazil, despite the recent removal of import tariffs.
– Global corn offtakes recovered in October after a poor September, mainly led by strong US loadings at the start of the 20/21 crop year. Stronger offtakes in Southeast Asia suggest sustained feed demand, limited domestic production and feed wheat supply.
– Chinese corn imports remained upbeat despite shrinking import margin, though corn is increasingly priced at a premium to wheat, leading to feed wheat substitution and wheat imports.