DTN reports:

Early Tuesday, USDA reported China bought 53.5 million bushels of U.S. corn for export, the largest purchase by China for U.S. corn since August. March contracts of corn, soybeans and all three wheats posted a second day of double-digit gains, while the March U.S. Dollar Index is trading lower.

Wheat:

March KC wheat closed up 13 3/4 cents at $6.41 Tuesday, going along with higher closes in corn and also with higher wheat prices in France and the Black Sea. Recent news items supporting Tuesday’s higher wheat prices include a report from the South China Morning Post that China bought 600,000 metric tons (mt) of wheat from Australia in December, Australia’s largest 1-month total on record. As DTN Contributing Analyst Tregg Cronin reported in Tuesday’s Early Word Grains, China sold 292 mb of wheat from state reserves the past two weeks, yet July common wheat on China’s Dalian exchange remains expensive at the equivalent of $10.73 a bushel. Here in the U.S., Monday’s winter storm laid protective snow cover on winter wheat crops in Nebraska and much of Kansas. Late Monday, state NASS offices issued good-to-excellent winter wheat crop ratings of 43% in Kansas, 68% in Montana and 20% in Texas. Oklahoma’s crop was rated 61% good to excellent, but 51% of the crop is being grazed. Fundamentally, China continues to show insatiable demand for feed grains and oilseeds, reaching even into the wheat markets. U.S. wheat exports have shown no unusual activity to date, but there is potential for higher-than-expected demand yet in 2020-21 and in the new-crop season. Technically speaking, the trends remain up for all three March contracts of U.S. wheat with additional bullish help from corn and soybeans. DTN’s National HRW Index closed at $6.01 Monday, down from its 6-year high. DTN’s National SRW Index closed at $6.28, down from its highest price in six years.

Corn:

March corn closed up 20 3/4 cents at $5.32 1/4 Tuesday after USDA reported China bought 53.5 million bushels (mb) (1,360,000 mt) of U.S. corn and another 4.0 mb (102,800 mt) were sold to unknown destinations, both for 2020-21. Even if that was all China bought this week, it would be the highest weekly total of corn sales to China since August and follows three and a half months of quiet activity. May corn on China’s Dalian exchange was down 0.4% Tuesday but is still expensive at $10.91 a bushel. We have been wondering why China refrained from buying corn for so long and Tuesday’s sale confirms the view of Dalian prices that corn remains in short supply in China. With U.S. corn export commitments now at 1.93 billion bushels (bb) and no new export competition likely until at least late June, there is plenty of time for U.S. corn export sales to increase more. The 7-day forecast expects moderate to heavy rains to benefit crops in Argentina. Heavy rains in southern Brazil, however, are problematic for soybean crops nearing harvest and may add to this year’s delay in planting Brazil’s second corn crop. Fundamentally, Tuesday’s big export sale to China revives bullish hopes for corn prices and continues to gradually increase the outlook for corn prices. From a technical view, the trend in March corn remains solidly up. Prices have traded above the 30-day average since August and the average is now at $4.80. DTN’s National Corn Index closed at $4.93 Monday evening, below its 7-year high and is 19 cents below the March contract. Outside markets are quiet and the March U.S. Dollar Index is down 0.24. The International Monetary Fund predicted world GDP will be up 5.5% in 2021 and U.S. GDP will be up 5.1%. The state of California announced it will lift its stay-at-home order Monday as intensive care unit capacity is increasing.