February 28, 2011

China not a big corn buyer in short term

China is not likely to import large amounts of corn in the near term unless it has a crop shortfall, a USDA official said Friday (Feb 25).

In recent years, China imported about one million tonnes annually. Early this month, the US Grains Council said China might need nine million tonnes of corn this year due to dwindling stocks.

Current prices do not favour sales of US corn to China, nor does Chinese policy support large imports at present, the official said. China is second to the US in corn production and use. The US accounts for half of world trade in corn.

USDA says in the medium term China is likely to become a net importer in the range of five million tonnes a year. China grew 168 million tonnes in 2010. Winter drought in the North China Plain has sparked concern about the winter wheat crop. Corn is grown in some of the drought areas too.

Wheat regions in the northeast part of China have suffered from drought conditions but the lack of rainfall is only modestly below normal during the dry winter season, said a USDA meteorologist.

China will likely continue to buy Australian feed wheat supplies, as the country is expected to sell record amounts of feed wheat to China this year, traders said.

Meanwhile, a dip this week in Chicago Board of Trade soy futures should make American supplies more competitive with recently harvested beans from Brazil.