May 14, 2010

China bought 369,000 tonnes of US corn, which is the second big sale of US corn to China since late April and the single largest purchase by Beijing since 2001, the USDA confirmed on Thursday (May 13).

Chicago Board of Trade May corn futures, up more than 6% since the first purchase of 115,000 tonnes was confirmed on April 28, fell 5-1/4 cents to US$3.66-1/2 a bushel on Thursday. The sales were already factored into the market.

The purchases by China come at a time when Beijing has been selling reserves to tamp down rising prices.

Traders and analysts said the purchases were primarily for feed makers in China, adding there has been no sign yet that the Chinese government was building state stockpiles.

"What we have now is ad hoc purchases by feed makers," said grains analyst Dan Basse, adding that any purchases by China to build its reserves could lend a bullish tone to CBOT corn futures.

Traders and analysts estimated imports in the 2009-10 (August/September) and 2010/11 marketing years to range from 700,000 tonnes to six million tonnes.