By Isis Almeida
That’s because traders will want to see shipments take place before turning bullish on demand, said Terry Reilly, a senior commodity analyst at Futures International. Export sales are running at their highest levels since 1996, but some deals can still be canceled.
Corn prices have been in the doldrums much of this year even as China boosted purchases as part of the phase-one trade deal. Lockdowns from New York to Los Angeles kept cars off the roads, slashing demand for corn-based ethanol, and now analysts are expecting the U.S. Department of Agriculture
to forecast the highest yields on record.
“Traders need to see it to believe it,” said Reilly at the Chicago-based brokerage. “Exports might be the hidden giant in the room.”
American exporters sold almost 11 million metric tons of corn for shipment next season, the highest for this time of year since 1996, according to USDA data through July 30. China accounted for more than half, with the Asian nation now on track to exceed its corn import quota set by the World Trade Organization for the first time ever.
Still, analysts surveyed by Bloomberg expect U.S. corn yields to rise to 180.5 bushels per acre, topping previous estimates of 178.8 and 2017’s record of 176.6. The USDA will publish its World Agricultural Supply and Demand Estimates report on Wednesday.
“The market sees supply rising faster than demand,” said Arlan Suderman, chief commodities economist at brokerage StoneX, adding that the Derecho storm blowing through the Midwest Monday is “taking some off the top of this year’s crop.”
Chicago-based AgResource estimates 35 million to 85 million bushels of corn production could have been lost in the storm.
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