Corn futures eased by 0.1 percent to $3.87 a bushel from pressures of weakness in ethanol, following China’s tax hike on imports from the United States.
The grain, one of the commodities undermined in the trade tiff between China and US, however, has some supportive factors going for it, notably the lower-than-expected US sowings data on Friday, and ideas that planting may be hampered by wet and cold weather.
“Without a shift in the weather pattern, it does look like there will be traditional corn growing areas that will get a later start than normal,” said Benson Quinn Commodities.
“Weather does look to be a concern in regards to cold and wet especially in areas to the north and east,” said Mike Mawdsley at First Choice Commodities.
The US Department of Agriculture (USDA) data on corn use for ethanol in February came in at 434 million bushels, up 10 million bushels year on year, but in line with market expectations.
However, price movements on the broader agricultural commodities complex have been less marked even in the market for soybeans, which are still under particular investor discussion over the potential for action from China, the top importer of the oilseed.
The consensus theory is that China has insufficient alternative origins, in essence in Argentina and Brazil, to source all of its soybean import needs, without turning to the US.
Yet, some creative thinking is coming up with alternative ideas, with Karl Setzer at MaxYield Cooperative, for instance, noting that “after considerable research, trade is finding that China may be able to avoid importing many US soybeans if needed”.
The theory rests on the idea of China buying instead soymeal from South America, on top of soybeans themselves, supplies which when combined with the country’s elevated distiller grain (DDGs) production will cover much of China’s projected demand for high protein feed.
Soybean futures did rise in China itself on Tuesday, closing up 0.7 percent at 3,776 yuan per tonne on the Dalian exchange for May delivery, a seven-month high for a spot contract.
That rise would be consistent with the idea of Chinese soybean imports being more squeezed, but comes against a backdrop of a boost to global prices from data on Friday showing that US farmers intend to plant far less of the oilseed than had been thought.
Chicago soybean futures for May added 0.7 percent to $10.42 one-quarter of a bushel, recouping most of the losses of the last session and cushioning their 40-day moving average.