China made another massive purchase of U.S. corn Friday, pushing the total commitments by Chinese importers this week to about 5.5 million metric tons and sparking new optimism that U.S. exports could break a record for the 2020-21 marketing year.
The USDA announced Friday an export sale of about 2.1 million tons of U.S. corn to China for delivery in 2020-21. Similar daily sale announcements were released Thursday for 1.7 million tons, Wednesday for 680,000 tons and Tuesday for 1.36 million tons. All were to Chinese buyers and all were for delivery in 2020-21.
Gary Marshall, CEO of the Missouri Corn Growers Association, says he expects the large Chinese purchases to continue as well as help push overall U.S. corn exports to a new record level, possibly to as high as 65 million tons.
“It’s just fantastic,” Marshall told Agri-Pulse. “We think we’ll reach that easily.”
Mexico still hasn’t come back into the market at full force, but Marshall says he thinks that will happen soon.
“We’re only about four months into the marketing year and we have another seven months that we’re going to see a lot of corn exported,” he said. “We’ve already shipped somewhere around 53 million metric tons of corn this year.”
And China, he added, will continue to play a role.
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“We certainly think that market is going to continue through this year and probably into next year,” Marshall said. “As they rebuild their swine herd back up that they’ve torn down … because of (African swine fever) we think we’re going to see a lot of corn use.”
Arlan Suderman, Chief Commodities Economist for StoneX Group Inc., tells Agri-Pulse that China needs U.S. corn because of a 30-million-ton deficit of livestock feed, but the country has also been releasing a lot of wheat from its reserves and importing sorghum and barley.
Still, the price of U.S. corn is very attractive right now for the Chinese, Suderman added. Domestic corn prices in China are at record levels – about $12 per bushel – and the cost of U.S. corn is about $3 less, even after the expense of shipping it.
But with recent pushes by the Chinese Communist Party to emphasize the need for self-sufficiency, Suderman says he is anxious to see the sales turn into actual shipments.
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