Corn Hits New High on China Buying Interest Hopes
By Kirk Maltais
-- Corn for May delivery rose 3.1% to $6.25 1/2 a bushel, a
nearly eight-year high on the Chicago Board of Trade Wednesday,
partially in reaction to speculation China may soon return to
purchasing U.S. grain exports.
-- Wheat for July delivery rose 2.1% to $6.75 a bushel.
-- Soybeans for May delivery rose 1.7% to $14.97 1/4 a bushel, a
nearly seven-year high.
Welcome Back: After a long absence from buying large amounts of
U.S. grain exports, China is rumored to be thinking about stocking
up on grains again, which boosted prices Wednesday.
"We heard they were in for corn, new-crop soybeans -- at least
inquiring -- and someone mentioned wheat, [which] I doubt," said
Terry Reilly of Futures International.
The Chinese Ministry of Agriculture said Wednesday it plans to
try and feed livestock more wheat in lieu of corn and soymeal.
Weathered: Weather in both North and South America continued to
support grains futures.
"The most impact now is coming from the unseasonably cold
temperatures across the Corn Belt," said Karl Setzer of AgriVisor.
"Overnight lows are forecast to drop into the freezing range in
several areas for the next five to seven days ... While the U.S.
corn crop is not far enough along for this to cause major issues,
the cold temperatures could easily slow germination and
Impressive Strength: Grain futures trading on the CBOT Wednesday
rose, as a risk-on sentiment theme continues.
"CBOT values are higher as the bull market maintains its upward
velocity," said AgResource. "Another round of new contract highs
were scored in May corn, May soybeans and May soybean oil
overnight. Impressively, the volume of trade expanded on the
April has been a strong month for grains, this after futures
took a hit in the prior month.
High-Octane Soyoil: One factor that's providing support for the
rally seen in soybeans is enthusiasm behind biofuels, particularly
"It's a repeat of the euphoria of the early 2000s," said Arlan
Suderman of StoneX, adding that the introduction of corn-based
ethanol at that time prompted the same type of price surge for
"That euphoria is returning, but the focus this time is on the
vegetable oil market, led by soyoil," said Mr. Suderman. "New
production plants are popping up across the country, and around the
world, with uses ranging from over-the-road trucks to passenger
airlines. Demand is expected to far exceed the supply over the next
five years, pushing the industry closer to the point of crushing
Stockpile Shrinkage: U.S. ethanol stockpiles slid for nine
consecutive weeks, according to the latest data reported by the
EIA. Ethanol inventories totaled 20.4 million barrels for the week
ended April 16. It's the lowest that inventories have been since
mid-November and the figure came in on the high end of estimates
provided to Dow Jones by analysts.
Meanwhile, ethanol production for the week was unchanged by the
EIA, totaling 941,000 barrels per day.
Looking for a Rebound: Grains traders are projecting export
grain sales to rise from lower levels seen in last week's USDA
report. The uptick is expected to be seen particularly in corn
exports, with sales forecast anywhere between 400,000 metric tons
to 1.1 million tons for the week ended April 15, which would be up
from 380,300 tons reported in last week's report.
-- Ethanol producer Valero Energy Corp. is scheduled to release
its first-quarter earnings before the market opens Thursday.
-- The USDA is due to release its weekly export sales report at
8:30 a.m. EDT Thursday.
-- The USDA is scheduled to release its monthly cold storage
report at 3 p.m. EDT Thursday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
April 21, 2021 15:49 ET (19:49 GMT)
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