Corn Prices Near 2023 Highs as Traders Await China Deal

The price of corn has been rising, nearing its 2023 highs, as traders speculate about China's potential purchase of US farm goods. The speculation led to a sharp gain on Monday, with Chicago contracts increasing by up to 1.4%, but the market eased back on Tuesday.

China had earlier agreed to buy $17 billion worth of farm goods, including soybeans, and traders are now waiting to see if Thursday's Washington summit will bring any concrete US grain orders. So far, there is little sign of buying ahead of the meeting, aside from China having recently crossed the halfway mark toward a 25-million-ton soybean target.

According to Matt Campbell, a risk management consultant at StoneX, corn would likely be a large portion of these import targets based on historical Chinese import data. However, he also noted that domestic prices in China are cheaper than US offers, making imports tough to justify. As he put it, 'The US is not competitive price-wise today.'

Crop prices remain parked close to multi-year peaks due to a hot summer clipped yields and the Russia-Ukraine conflict that has snarled Black Sea grain flows. The US-Iran war has also kept oil markets firm.