Demand Shift in Corn Leads Buyers to South America

December 7, 2016 8:55AM CST

So much for the U S crop size, which is big. The trade is now looking at the demand side, which leads us to South American production. Argentina has been dry, which concerns the trade, and ethanol demand has been good. Soybean strength has been supportive along with the funds buying.

With all of the above being said, the bull still needs to be fed. The producer hasn’t been a heavy seller of product. He will have to move more, as he will need funds to pay his costs. In addition, he might not have enough storage space for the harvest. South American weather will probably not stay dry forever. There will be enough water to keep the crop growing.

With a very large supply side, you will need something new from the from the demand side or a South American issue to keep the rally in tact. At these levels, it’s very difficult to be a buyer.

Corn Daily

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