Corn and Soybeans Trade on China Buying
Last week all the talk in the corn market was will China buy U. S. Corn and how much. There was talk or rumors that China would buy 3 million metric corn from the U.S. It has been quite a while since China bought that much corn from the U.S. Remember a little over a month ago the USDA went back 10 years and recalculated how much corn China had on hand. The result was the USDA more than doubled the world corn carryover by "finding" all that corn in China.
So, if China has all that corn in storage why would they be buying more corn? Maybe all that corn the USDA found is not really there? If China does have all that corn maybe it is of such poor quality no end user wants to buy it? It is well documented that China does not have bins with aeration like we do. I have read corn is just dumped in a big building. That may work fine for a short time but not for long term storage!
It was a very disappointing week for soybeans. China did in fact buy beans from the U.S. The total was 1.43 million metric tons but it was "not enough," or at least that was what the soybean bears said. Beans did rally into the announcement so it may have been "buy the rumor, sell the fact." The soybean bears also assumed that that would be all the beans China would buy. However, why would they buy all the beans they needed in one huge amount?