So far, in the bullish trend, the March and May positions of US cereal increased by 6.17 and 4.62%.
With the active participation of the investment funds, corn prices yesterday added the fourth consecutive bullish wheel on the Chicago Stock Exchange. The threat of excessively wet weather over the US agricultural regions during the beginning of the 2020 cereal sowing period, was one of the factors that encouraged the purchase of speculator contracts.
At the end of trade, the boards reflected increases of US $ 2.06 and 1.48 over the March and May corn contracts, whose adjustments were 152.35 and $ 151.57 per ton. So far, in the bullish trend, these positions increased by 6.17 and 4.62% compared to the values last Thursday.
Investment funds totaled 13,000 corn contracts, equivalent to just over 1.65 million tons, and completed the purchase of 41,500 contracts.
There has been speculation that climatic conditions wouldn’t be ideal for the beginning of the planting season. Yesterday, USDA announced that a Chinese purchase of 110 000 tons of sorghum was positive. The news motivated operators to predict the greater participation of Chinese buyers in the United States. It was something that did not happen after the signing of the Phase One Trade Agreement, in mid-January.
Soybean may obtain more gains
Also, Soybean Futures raised at the Chicago Board of Trade. Terry Reilly, of Futures International in Chicago, said that with the recovery in energy prices and global markets, a little support comes into the agricultural markets. He said a move by Argentina to raise export taxes on soybeans, and the possible shift in trade flows towards the US was supporting the soy market.
Increasing export demand was also supporting corn, with a Chinese purchase of US sorghum on March 4, according to Reilly.
However, strength in the US dollar index was a limiting factor in the grains. This is as the rising currency makes US exports more expensive for international buyers.
Besides, shifting sentiment on the COVID-19 coronavirus is creating a rollercoaster in these markets. It’s creating uncertainty on the volatility in the futures. He states that it’s not clear how much it will spread and affect global logistics.
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From a chart viewpoint, corn may go back up in the US. From $3.90 to $3.95 per bushel over the next few weeks if the funds pour money back into the market. May corn ended at US$3.85 per bushel on March 4.
For soybeans, Reilly saw the possibility for the May contract (traded at the US $9.0725 on March 4) to sell to two-month highs again in the US $9.20 to the US $9.25 per bushel area.