Grains rebounded sharply today from Friday's limit down move. December corn finished up 21 ½ cents, January soybeans finished up 17 ½ cents, and December wheat finished up 3 ½.Overnight the corn market gapped higher opening at $5.41 ¾. Funds were heavy sellers on Friday, but flipped and were once again heavy buyers today. The market was unable to fill the previous gap in Dec corn set at $5.28 ¼. Today's general commodity rally was impressive considering the US dollar was sharply higher.
Export inspections this morning were below last week's numbers for corn, wheat, and soybeans but were not a major factor. Since we had a limit move Friday, limits were expanded to 45 cents allowing corn to move up and over 30 cents higher at one point in the day. Tomorrow we will go back to standard limits in the grains.
There were rumors that China is entering an agreement with Argentina to import between 4 and 8 million MT's of corn. From what we know and have heard this process should take up to 6 months to a year to complete, since currently Argentina is not approved by China as an exporter of corn. Maybe they are trying to speed the process along but as it stands right now we think it could be over-assumptions by the market. Another reason why the market was higher was the lack of a Chinese rate hike over the weekend. (more)
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