China to buy more US corn

A corn processor in the northern Chinese province of Shandong bought one cargo of US corn this week and many feedmills plan to buy more due to lower import prices, the China National Grain and Oils Information Centre (CNGOIC) said on Thursday (Jun 11).

 

The government has been trying to support feedmills to prevent a shortage and stop prices spiking, while offering no explicit help to corn processors, who have been enjoying higher margins.

 

Beijing has banned bidding by corn processors at weekly government auctions to ensure supplies for feed producers. It has sold off all the temporary corn reserves in north-eastern China, the main growing area, and will start offering its strategic reserves to feedmills this week.

 

Chicago traders said that China had bought at least one and as many as three cargoes of US corn this week, including one cargo traded on Tuesday (Jun 8) for 2009/2010 shipment. They did not identify buyers.

 

A domestic price rise this week has eased, but US imports have remained relatively cheap, because a steep fall in Chicago Board of Trade <0#C:> corn prices left US corn prices more than RMB200 (US$29.29) per tonne cheaper than domestic corn <0#ASCORN-CN>. China's imports could pick up again because of the price spread, after Chinese buyers booked nearly 600,000 tonnes since late April, traders said.