October 29, 2020

USDA defends its monthly forecast of US corn imports by China

The United States Department of Agriculture (USDA) defended its monthly forecast of US corn exports to China, which analysts said has already surpassed USDA's estimate, Reuters reported.

In the USDA's World Agricultural Supply and Demand Estimates (WASDE) report on October 9, it forecast China's corn imports in the 2020/21 marketing year at 7 million tonnes, matching its 2019/20 forecast with no changes compared to the previous monthly report.

Weekly USDA export data shows 10.5 million tonnes of US corn was sold to China by October 15 for the 2020/21 marketing year begun September 1, even though only 1.7 million tonnes were actually shipped.

China is increasing is imports of feed grains because of lower domestic supplies and food security concerns, as it rebuilds its swine herd.

It's increased grain demand has pushed the benchmark Chicago Board of Trade corn futures Cv1 above US$4 a bushel, the first time this happened in a year.

China set its 2021 tariff rate quota for corn at 7.2 million tonnes on September 17, but industry sources told Reuters that China's government is expected to issue additional import quotas and purchase more corn in the new crop marketing year.

Analysts behind the USDA's WASDE reports are unwilling to speculate because China has not confirmed the additional quota. The WASDE reports are treated as the gold standard for world crop forecasts by traders.

Mark Jekanowski, chairman of the USDA's World Agricultural Outlook Board, said they do not forecast policy changes, especially those in foreign countries.

-      Reuters