Chicago Board of Trade corn futures ended the session essentially flat on Wednesday as market participants awaited clarity from a high-profile diplomatic meeting in Beijing that could include agricultural commitments.
President Donald Trump arrived in Beijing on Wednesday for a two-day summit with Chinese President Xi Jinping. The stated U.S. objective during the talks is to press China for greater market access for U.S. firms. Traders and analysts are closely monitoring whether the summit will yield concrete pledges by China to purchase U.S. agricultural commodities.
What markets are watching
Market participants are specifically watching for any commitments by China to buy U.S. corn, wheat or distillers dried grains with solubles, a co-product of ethanol production. While observers acknowledge that a farm-related agreement could be part of the summit outcome, analysts do not expect material new soybean purchases beyond the commitments China made in an agreement reached last October.
Meanwhile, data from the Energy Information Administration showed a divergence in the U.S. ethanol complex: weekly ethanol production rose from the prior week, while ethanol inventories moved lower. These metrics are being used by market participants to assess domestic demand for corn used in ethanol production.
Price action
CBOT July corn finished 3/4 cent higher at $4.80-3/4 per bushel. That close marked the contract's highest settlement since May 5, though overall movement for the session was minimal as traders balanced hopes for new export demand against limited expectations for additional soybean purchases.
Market context and next steps
Traders will continue to parse developments from the two-day leadership meeting for any specifics on agricultural purchases or commitments that could alter export demand forecasts. In parallel, weekly ethanol statistics will remain part of the market's assessment of domestic feedstock consumption.
Given the close-to-flat price move and the conditional nature of any potential farm deal, corn market participants appear to be adopting a wait-and-see stance until officials announce any firm commitments.