March 21, 2011

 

 

China purchased corn from the US on Thursday (Mar 17) and may make further purchases this year, according to a person with knowledge of the situation.

 

Without disclosing the size of the purchase, the source said China may continue to import US corn this year and could expand buying next year to ensure sufficient supplies.

 

Commodity traders have been closely watching Chinese imports of US corn, which are projected to drop to a 15-year low this year. Traders and analysts had been talking about the potential for significant sales to China for months, but expectations for business decreased as corn prices climbed.

 

Yet speculation on Chinese buying peaked Thursday after the USDA reported private exporters struck deals to sell 116,000 tonnes of corn for delivery to unknown destinations during the 2010-2011 marketing year.

 

Corn futures surged Thursday, hitting the limit on one-day gains under Chicago Board of Trade rules. Corn for May delivery recently traded 28 cents, or 4.3%, higher at $6.74 1/2.

 

China's corn stocks are at a historically low level, suggesting the country may have to import large volumes, Standard Chartered wrote in a research note last month.

 

China has not been a large importer of US corn in recent years, yet some analysts predict its buying will pick up, potentially reshaping the global grain trade in coming years.