Corn reverts gains made in the previous session as the US dollar gains grounds.
The commodity rose in the Chicago Board of Trade yesterday due to expectations of strong Chinese demand and uncertainty in supply.
On Tuesday, the United States announced its biggest maize sale to China in July at 1.6 million tonnes.
Similarly, ethanol imports hiked to record-high, uplifting demand prospects for the corn-based biofuel.
It hit its highest settlement since June 2013 before steadying with a two-week high at $5.39 ½ per bushel.
However, it failed to maintain the fourth-day winning streak as traders flee with what is left with their profit from Wednesday’s gains.
In the latest charts, the most actively traded contract in the CBOT fell by 0.5% to $5.31 ¾ a bushel.
Despite the recent setback, agriculture trading experts noted that the commodity will remain bullish in the nearer-term prospects.
This is for the reason that the price support is majorly derived from robust Chinese imports, making the hike demand-driven and relatively more sustainable.
The world’s second-largest consumer is projected to follow a steady path towards recovery in the coming months, thus putting its orders on a steady rise.
Currently, the fall in prices is due to the rise in the greenback.
Normally, an uptrend in the USD index makes greenback-priced grains, such as corn, to be more expensive.
In response, traders from other currencies deviate from the affected items at a given time.
Nevertheless, FX strategists noted that the USD will remain volatile in the coming sessions. This is due to the on-going discussion of the new stimulus package worth $1.9 trillion.
Soybean Prices Hiked
Unlike its counterpart, soybean prices remained robust and made their fourth-consecutive hike for the week.
Soaring export demand, rising prices, and a looming soy shortage at the tail end of the season feed into to the hike.
In the latest charts, soy contracts hike by 0.1% to $13.76 ½ per bushel. Thus, the processors emerge from their busiest year on record in 2020.
On the other hand, wheat followed the downward trajectory after falling by 0.6% to $6.54 ½ per bushel for the day.
Similar to its counterparts, the commodity is also on a tight spot amid a supply shortage concern.
Top exporter Argentina currently considers options to keep the domestic population armed with supplies. They are at the same time also taking into account its need to fulfil international orders.
Farmers are reportedly under pressure as state intervention reportedly considers entering the picture.
- Trading Instrument