Corn

November 4, 2020

The Research Team reviews the Corn market

 

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4 November 2020

  • The focus is now back on the crop-related weather developments in South America. We account for multiple variables which affect the yield in key production regions, and we display this in our proprietary Climatic Conditions model. The result so far challenges the strong upward price trend of the corn market suggesting that the yield is unlikely to surprise on the downside. Therefore, it is more likely to be demand-related data which is propping up this rally, not supply.
  • Our proprietary metric for weekly corn Implied Demand continues to suggest that the positive demand shock is still very much in place. The market has responded in fashion. Our model is picking up increasingly negative signals from demand downstream, which remains our main concern for the 3rd week running.
  • Our proprietary quantitative research platform for agricultural markets suggests that the importance of macro factors in the corn price formation has decreased. The momentum behind the credit creation is off its recent peak, which is an important observation to note. 

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