Background on Key Players and Relevance
The recent surge in US corn prices, reaching a six-and-a-half-week high, is attributed to short covering and robust export demand. This development comes as wheat and soybean prices experienced weekly declines. The corn price increase is the third consecutive weekly rise, driven by strong export sales and expectations that the USDA will downgrade its 2025 harvest outlook in an upcoming monthly report.
Who’s Involved?
Terry Reilly, a senior agricultural strategist at Marex, highlighted the significant short covering in corn positions (ranging from 35,000 to 50,000 contracts) in recent sessions. He also pointed out record-breaking export volumes for both old and new crop corn.
Market Movements
- Corn: Corn prices for December delivery in Chicago rose by 0.75 cents to $4.2050 per bushel, fueled by short covering and strong export demand.
- Soybean: Soybean prices for November delivery dropped by 3 cents to $10.30 per bushel, as initial short covering faded and the market refocused on China’s lack of demand for cargoes.
- Wheat: Wheat prices for December delivery increased by 1.75 cents to $5.2125 per bushel, following a session where wheat hit contract lows before rebounding.
USDA Data and Export Sales
The USDA reported on Friday that US export sales of new-crop corn for the week ending August 28 totaled 2.117 million metric tonnes, nearing the upper end of trade estimations.
Although old-crop sales recorded a deficit of 280,900 tonnes, commitments for the season-to-date are 26% higher than last year’s figures, according to USDA data.
Key Questions and Answers
- Q: Who is Terry Reilly and why is he relevant? Terry Reilly is a senior agricultural strategist at Marex. He provided insights into the recent corn market movements, highlighting short covering and robust export demand.
- Q: What caused the surge in corn prices? The corn price increase was driven by short covering and strong export sales, with expectations that the USDA will downgrade its 2025 harvest outlook.
- Q: How did wheat and soybean prices perform? Wheat and soybean prices experienced weekly declines, with wheat rebounding from contract lows and soybeans falling due to fading short covering and China’s lack of demand for cargoes.
- Q: What did the USDA report regarding corn export sales? The USDA reported that US export sales of new-crop corn totaled 2.117 million metric tonnes for the week ending August 28, close to the upper limit of trade estimations.
