The USDA announced Monday that China purchased more than 1 million metric tons of U.S. corn, adding to the buying spree from tight U.S. stocks as the Russian invasion continues to hobble Ukrainian exports.
The Monday report shows Chinese buyers snapped up 1,020,000 tons of U.S. corn. The purchases include 680,000 for delivery in the current marketing year and 340,000 tons for the 2022-23 marketing year, which begins Sept. 1.
China’s preferred supplier of corn is the Ukraine, but the country’s exports are all but shut down because of the Russian invasion, leading Chinese buyers to try and make up that lost supply with U.S. corn, says Arlan Suderman, chief commodities economist at StoneX Group.
“It’s evidence that China is getting concerned about the global supply of corn,” Suderman said Monday. “Ukraine is no longer available for them – at least as long as this war continues and as long as Ukrainian ports are blocked.”
It’s not just Ukraine that has the Chinese concerned, he said. The USDA recently cut its forecast for corn planting in the U.S., and recent dry weather in Brazil has raised some concerns about the country’s second corn crop, or “safrina.”
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USDA said in its March 31 Prospective Plantings report that U.S. corn planting would drop by 4%, and an analysis last week noted farmers are favoring soybeans over corn.
Brazil has just about completed planting its second crop – the corn farmers plant after they harvest their soybeans, according to AgRural, a Brazilian consulting firm.
In a similar move about a week ago, Chinese buyers purchased 1,084,000 tons of U.S. corn. Of that total, 676,000 tons was for delivery in the 2021-22 marketing year and 408,000 tons for delivery in 2022-23.
“I think it’s notable that the last two major purchases of over 1 million tons that they made, better than two thirds of each of those were old crop supplies,” Suderman said.
And that, he stressed, indicates that China “continues to take shipment of corn at an active pace through the summer.”
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