April 25, 2012

US affirms 480,000 tonnes corn sale to an unidentified buyer

Days after the grain markets buzzed with rumours that China had purchased up to one million tonnes of the grain from the US, the US government on Tuesday (Apr 24) confirmed the sale of 480,000 tonnes of US corn to an unidentified buyer.

The announcement followed another sale confirmed by the department on Monday (Apr 23) of 120,000 tonnes to an unknown buyer.

"This is certainly the number most in the trade had expected for China," said Rich Nelson, director of research for Allendale Inc.

China, the top importer of US soy, has emerged as a major buyer of corn from the US, buying nearly four million tonnes so far in the 2011-12 (September-August) season.

"Everyone has been waiting for a China announcement, they've (traders) been expecting 500,000 to one million tonnes," a CBOT floor source said. The source said the sales confirmed on Monday and Tuesday were probably for China.

Chicago Board of Trade corn futures have been supported by rumours of the sales to China since last week. The USDA said the 480,000 tonnes of corn would be delivered in the current marketing year ending August 31. The 120,000 tonnes announced on Monday will be delivered in the 2012-13 season.

By law, exporters must report promptly the sale of 100,000 tonnes or more of a commodity to the same destination in one day. Sales of smaller amounts are reported weekly. The destination of cargoes are sometimes not disclosed at the buyers request but are identified when the vessel is loaded.

China Grain Reserves Corp (Sinograin), which manages the state grain reserves, said on Monday it may have signed deals to import US corn and it is ready to boost purchases to replenish depleted reserves if the prices are attractive.