April 5, 2012
US corn sales to China show export recovery
After their worst week in almost eight years, corn sales of 240,000 tonnes, half to China, strengthened hopes for an upturn in US corn exports.
The US, the top exporter of the grain, sold 157,700 tonnes of corn in the week to March 22, of crop from both last year and the 2012 harvest, the USDA said.
The figure, which factored in the cancellation of 158,900 tonnes of corn booked to "unknown destinations", represented the lowest for combined new and old crop harvests since June 2004.
It was also well below the figure of at least 650,000 tonnes that the market had expected.
However, the USDA also unveiled, through its daily reporting system, the sale of 120,000 tonnes of corn to China and a further 120,000 tonnes of corn to "unknown destinations".
The sales follow persistent rumours of fresh Chinese purchases of US supplies, following a tumble in prices over the past two weeks.
Indeed, the weekly export data cover a period in which Chicago futures prices reached US$6.75 a bushel - US$0.60 a bushel above current prices.
"Weekly corn sales as of March 22 indicate that the global market could not find value near the highs of the range," Benson Quinn Commodities said.
But following the price slide "old crop corn is approaching levels that should have value, if it hasn't already".
Corn for May lost further ground in Chicago on Thursday (Apr 5), closing down 2.6% at a two-month low for a spot contract of US$6.04 a bushel.
The new crop December lot ended 2.7% lower at US$5.24 a bushel, the contract's lowest finish in a year.
China's latest purchase takes above 3.8 million tonnes its purchases of US in 2011-12, including both outstanding orders and supplies already exported.
The USDA forecasts China importing four million tonnes of corn over the season, which ends in August, although many analysts believe this figure will be upgraded, potentially above the record 4.3 million tonnes set 16 years ago.