12 January 2021
- Supply tightness contributed to the impressive market run in recent months, but our projections going forward suggest that the supply will increase. Our stance is at least partially contradicted by the climatic conditions in Brazil. Dryness contributed to the recent trend of our proprietary climate conditions model which is still price-supportive.
- 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 – please refer to the Chart of the Week for further details. We have documented this exceptional demand strength in all our publications since Q3 2020. It is worth noting that our model assesses demand as strong along the entire supply chain, not only mid-stream where the speculative buying of physical volume is usually concentrated.
- Our proprietary quantitative research platform for agricultural markets suggests that the importance of macro-related price drivers continued to decline in the last couple of weeks. The focus of the market is clearly on supply and demand considerations which in turn re-calibrates our systematic algorithmic corn platform in favor of the good old fundamentals.