July 19, 2013

China remains as top buyer of corn, soy, and wheat

China maintains its position as a major buyer of corn, soy and wheat from the US after production was hampered by adverse weather conditions in 2012.

While total figures were once again on impressive levels, large sales of crops in 2013 were not much of a surprise to the trade. Many of the deals were either rumoured or officially confirmed by USDA previously under its daily reporting system for large purchases.

Corn bookings were the most impressive, reaching 68.7 million bushels, including 62.6 million bushels of new crop business. USDA has already reported most of the sales, including a huge deal to China for 47.25 million bushels. As a result, corn prices remained under light session pressure as traders broke ahead of the 8:30 pit open.

China was also the leading buyer of US wheat, taking 14.4 million bushels of the 36.6 million bushel total. Most of the business involved a deal for soft red winter wheat previously reported, as China boosts imports following problems with its crop that appear to be worse than earlier indications. China was looking for Australian wheat this week, and may also be taking more US originations. Wheat traders were anxiously waiting for news of Egypt's second snap tender of the season. Stockpiles are shrinking in the country, which had difficulty financing deals due to the political unrest.

Old crop soy sales were positive last week, after net cancellations during the previous period, with total 2012 and 2013 sales of 25.8 million bushels in line with trade estimates. Shipments remain slow, as the market rations dwindling supplies of old crop inventories. China and "unknown destinations" accounted for most of the new crop deals, with Mexico involved with most of the old crop.