Corn futures are trading on a low for the second session in a row. On Wednesday, the futures were down by 0.41% to trade at $542.53. The losses in corn prices are a reaction to the strengthening US dollar. However, the prices are still on an upward trend as demand for the commodity rises.
Strengthening US dollar
Corn prices are declining as a reaction to the strengthening US dollar. On Wednesday, the dollar index was up by about 0.09% to trade at $91.279. DXY tracks the performance of the greenback against other major currencies. The dollar is reacting to the bullish ADP national employment report. Nonfarm employment in the US has risen by 174,000 compared to the forecasted 49,000. The reading is also higher than the previous decline of 78,000 jobs.
The USDEUR currency pair is also up by 0.22% while USDGBP is trading at +0.17%. Like most other commodities, corn prices have an inverse relationship to the US dollar. This means that a strengthening greenback results in the decline of corn prices.
Rising demand for US Corn
On a daily chart, corn futures traded on a low for the second day in a row. However, the prices are still near the record high set in the past week. The high demand for US corn from China has helped curb the losses.
Last week, the USDA reported that China had purchased 1.36 million tonnes of US corn from private exporters. The purchase was the highest since July 2020. This week, the agency has indicated that US private exporters have sold 125,730 and 110,000 tonnes of corn to Mexico and Japan respectively. The orders are to be delivered
