Market Morsel: China buying the dip?
The market has been in freefall in recent times, as rainfall has improved in many parts of the northern hemispheres growing regions.
This week CBOT wheat is 7% down and corn 10%, based on the week on week average. A big fall after months of consistent rises.
While all the attention has been on the bearish news, some bullish factors are still out there. The monstrous demand by China for corn continues. The third chart below shows the export sales for the new crop to China.
The most recent export sales data for the period 7th May to 13th May, has seen 3.74mmt of corn sold to China. To put it into perspective, I have extended the chart to 2005. As we can see before the last year and a half, their imports were minimal.
There have also been additional sales in the period since 12th May:
- 20th May 1.22mmt
- 19th May 1.36mmt
- 18th May 1.36mmt
- 17th May 1.7mmt
The demand is still clearly strong, and China is making big purchases as the market falls. Buying the dip?