May 4, 2012

 

US corn export up to 21-year high on China demand

 

 

On the back of active buying by China, US corn export sales soared to a 21-year high last week which snapped up almost three million tonnes of the grain to rebuild stocks and put down its near-record-high domestic prices.

 

The lowest US corn prices in three months triggered the flurry of buying by both government and private importers in China, already the world's largest soy importer and a fast-growing importer of corn.

 

Prices have since rebounded and demand from China has slowed, but the latest wave of buying was further evidence that Beijing would step into the market on price dips to bolster its grain supply, which some analysts suggest may be smaller than official estimates.

 

"We've learned that China will be an active buyer at lower prices. We have an underlying tone of support right around this US$6 range (in spot month CBOT futures)," said Rich Nelson, analyst with Allendale Inc.

 

"There's still some discussion that they will have to revise down their estimate of last year's crop size, some people suggest by as much as 10-15 million tonnes," he said.

 

Government estimates are currently pegging China's crop harvested last autumn at more than 190 million tonnes. Many private forecasters are estimating nearer to 170 million.

 

Exporters sold 1.332 million tonnes of US corn for shipment in the September 2011-August 2012 marketing year in the week ended April 26 and 2.14 million tonnes for shipment in 2012-13, USDA data on Thursday (May 3) showed.

 

The 3.472-million-tonne combined marketing year total, within trade estimates for 3-4 million, was the biggest weekly sales volume since the week ended January 10, 1991, a week which included a record-large single day sale of 3.72 million tonnes to the Soviet Union.

 

Unknown destinations, widely believed to be mostly China, bought 509,500 tonnes of old-crop corn last week and 1.92 million tonnes of new-crop corn. USDA also reported 214,000 tonnes of old-crop and 172,500 tonnes of new-crop to China.

 

Japan, the world's top importer of US corn bought 357,500 tonnes for 2011-12.

 

Soy export sales last week jumped 23% to 1.732 million tonnes, 1.134 million tonnes of which was for shipment in the 2012-13 season which begins September 1, USDA data showed. The largest weekly sales in 10 weeks topped trade forecasts for 1-1.5 million.

 

China was the week's biggest buyer with 117,300 tonnes of old-crop purchases and 675,000 tonnes of new-crop purchases.

 

US wheat export sales were down slightly from the previous week at 711,600 tonnes, but the tally was still the second largest in more than two months. Traders had expected sales of 600,000-850,000 tonnes.