China's Buying Spree Continues, New Crop Corn Commitments Top 5 MMT

China's corn buying spree continued Friday with USDA confirming a sale of 1.36 million metric tons (mmt). The announcement came on the heels of a week of consistent new crop sales. USDA confirmed a sale of just over 1 mmt on Monday, followed by new crop corn sales of 680,000 on both Tuesday and Thursday.

Mike North, principal with ever.ag, says China is getting new crop sales on the books while the price is right. 

"They're not buying nearby corn, because why would I spend $7.50 when I can slide that forward into the new marketing year and pick up $6 corn at a discount," says North. "That's the kind of thing you're going to see more and more in the export arenas as we get closer. With some of the inability for us to ship, I think future cancellations on old crop ultimately will translate into shifting sales into into new crop."

John Payne, author of 'This Week in Grain' newsletter, says China's hunger for new crop is a positive sign for corn demand. 

It's bullish in the fact that we're beyond phase one now," Payne told AgDay host Clinton Griffiths. "So, if you go back to read the tea leaves from when the trade war started back in 2018, and then wrapped up early 2020, it said they were going to buy a certain amount of product in 2020, and hen certainly the product in 2021. Now they're reaching sales on the 2022 books. We don't have a lot of crop available for them to be buying right now."

According to U.S. Grains Council data, China's new crop commitments now top 5 mmt.