The USDA confirmed yesterday that Chinese buyers were again in the U.S. market, grabbing up another 1.199 million metric tons for delivery in the 2018-19 marketing year. I thought this was in-line with what most inside the trade had been thinking, but I guess the bulls wanted to hear confirmation of larger purchases.

Total Chinese purchases since last week are approaching 3 MMTs, but the trade clearly wants to see and hear more. As I mentioned a few weeks back, it feels like the trade wants to hear of + 6 MMTs to +8 MMTs being sold to China, before it even considers getting itself bullish the balance sheet.

Hence the recent, "buy the rumor, sell the fact" dance taking place inside the market. When the trade hears rumors of more Chinese buying, we seem to rally, when we get official confirmation of purchases from the USDA, the trade tends to sell off in a bit of disappointment.

Bears are also pointing to what appeared to be a heated meeting at the WTO yesterday, between U.S. and Chinese officials. There's also talk that weather in some of the stressed areas in Brazil might start to improve, i.e. some of the drier areas getting a little needed rainfall. I should mention, two new areas inside China (Chongqing and Guangdong) have announced the spread of African Swine Fever.

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The opinions of the author are not necessarily those of Corn+Soybean Digest or Farm Progress.