After a rough week last week, grains prices have rebounded at the end of this week.
March corn prices were up 46.75¢ and March soybean prices were up 56¢ for the week ending Jan. 29.
March wheat prices were up 28¢.
We had a big trading range again this week in corn – around 40¢.
So, we turned around this week and closed right around $5.50 per bushel.
Meanwhile, also soybean and wheat prices rallied up, trying to claw their way back up from the monstrous losses they had last week.
Soybeans lost $1.10 last week, and we didn’t could get all that back,.
Corn got all theirs back and then some, mading a key reversal higher.
A big impact on the markets this week were big buys from China.
On Tuesday US Ag announced its first flash sale, which amounted to 1.36 million metric tons of corn to China.
That one sale marked the biggest purchase by China in six months.
On Thursday, US Ag confirmed an other buying continued, with China buying another 1.7 million metric tons of corn.
Finally, on Friday, we have seen a other sale of 2,108,000 metric tons of corn.
However, farmers need to understand the logistics of these flash sales.
Private exporters has to report to the U.S. entity, any U.S. sale is made over 100.000 t — when it is made .
But a private export entity for instance, can make a sale delivered to China with the potential of coming from the U.S..
However, until the sale is assigned to their U.S. entity, it may sit in limbo.
Thus, it is possible those big Chinese “flash sales” of corn reported this week, at least for a part, are old news and just now catching up with sales that were rumored in weeks prior.
So, having it is worth to highlight thatunder such a ridiculous protocol it is like putting the fox in the chicken house — get the corn covered and maybe even buy grain on paper, and then announce it for a flash sale, sell the announcement and capture profit enhancement.
In the U.S., a stock market entity would likely go to jail under such a scenario — outside the U.S. — all is fair in love and trading commodities and thus the “buy the rumor; sell the fact.’”
This situation can really add volatility to the markets.
