You are here: Home » News » NEWS » Big Buys Turn Historic As China Sales Shatter Export Records

Big Buys Turn Historic As China Sales Shatter Export Records

Views: 106    


By TYNE MORGAN January 28, 2021


China’s appetite for U.S. corn seems unstoppable. Just this week, daily sales of corn to China added up to a record.

“It looks like this was the biggest week of sales to China ever,” says Arlan Suderman of StoneX Group. “It gets tricky, but according to our records, it’s a new record.”

Suderman says the largest one day export corn sale was 3.72 million metric tons, which happened in 1991 and was made by the USSR. While that still sets the record for the biggest daily sale, China’s daily purchases added up this week to set the new record.

The sales started Tuesday when USDA announced its first flash sale, which amounted to 1.36 million metric tons of corn to China, or 53.5 million bushels. That one sale marked the biggest purchase by China in six months.

“A 53.5 million bushel corn buy all at once is the biggest sale of corn that we've had to China since July,” says Suderman. “It’s pretty significant and helped explain why we saw the big run up in prices on Monday with some follow through today.”

The buys from China didn’t stop there. On Tuesday, China bought 680,000 metric tons of old crop. Also this week, ADM’s CFO said China committed to buy 200 million gallons of U.S. ethanol the first six months of this year, which also marks a record.

On Thursday, USDA confirmed the buying continued as the agency confirmed China bought another 1.7 million metric tons of corn.

What’s driving the demand? Experts say it’s a combination of things as demand rationing doesn't look to be happening yet.

“One thing that china is clearly doing is building stockpiles,” says Brian Kuehl  of Farmers for Free Trade. “They've been clear that they're trying to stockpile some of their feed. Second is the fact they are in the process of trying to rebuild from African Swine Fever.”

ProFarmer also reported this week China may be concerned about food shortages. But some in agriculture say the fact these major purchases are coming on the heels of President Joe Biden’s inauguration could also be a factor.

"We would know better than to say it wasn't coincidental,” says John Linder, an Ohio farmer and the National Corn Growers Association (NCGA) grower president. “It’s certainly exciting. As some have said, it may be a proverbial carrot to signal to the new Administration, ‘Let's get back to the table. Let's talk, let's see what we can do.’”

Linder thinks corn farmers are well positioned to meet the new demand from China.

Suderman says in addition to China’s continued purchases, other countries are also stepping in to buy corn under “unknown destinations.” Suderman thinks that could be a sign other buyers are now getting nervous about supplies and prices.

Customer First
Shanxi Guangyuan Fertilizer Co.,Ltd. is a modern comprehensive private enterprise combining scientific research, production and sales.
     QR Code
Copyright © Shanxi Guangyuan Fertilizer Co.,Ltd. All Rights Reserved.