July 4, 2013

China has booked an extra three cargoes of US corn, bringing the total so far for this year to 2.8 million tonnes, as confirmed by the China National Grain and Oils Information Centre (CNGOIC).

The corn was purchased at US$272 a tonne, some RMB400 (US$65), a tonne cheaper than domestic supplies, the CNGOIC said.

Separately, traders said that China had purchased 300,000 tonnes of new crop Australian wheat, with the USDA confirming the sale to China of 360,000 tonnes of US soft red winter wheat, the type traded in Chicago.

The deals following China's order two weeks ago of 200,000 tonnes of French wheat, which temporarily revived prices, with rumours at the time of interest in Canadian supplies too.

The purchases, said to be for January delivery for the Australian order, come amid concerns over the quality of the Chinese harvest, after late rains damaged an estimated 10 million tonnes of the crop.

Separately, China is, through Sinograin, building state reserves too, although the Australian deal was said to have been purchased by grain   trading giant China Oil and Food Corporation (COFCO) for meeting more immediate market needs.

"The Australian wheat was purchased by COFCO for the market," rather than for the reserves, a Beijing-based trading manager with a global trading company told Reuters.

"The purchases are definitely due to damage of domestic wheat quality."