China took advantage of the sharp drop in U.S. corn to buy heavily!
1. China aggressively purchases US corn at low prices
According to data from the U.S. Department of Agriculture, as of the week of March 16, the total amount of U.S. corn exports to China was 2.245 million tons, setting a new 22-month high. Since March 16, Chinese buyers have bought another 832,000 tons of corn. Calculated in this way, China's cumulative import volume has reached 3.077 million tons.
The latest deal announced by the U.S. Department of Agriculture on Friday showed China bought 204,000 tonnes of U.S. corn, the eighth purchase confirmed in the past nine business days.
Mainly consider the following reasons:
U.S. corn prices fell, lowering import costs. Traders and analysts said the drop in prices had triggered large purchases of U.S. corn by China, the world's largest corn importer, to make up for a slow start to its import program.
U.S. corn futures fell 7.3 percent in February and hit a seven-month low on March 10 before China began buying aggressively.
2. China rapidly increased corn imports
Darin Friedrichs, co-founder of Sitonia Consulting in Shanghai, said China has rapidly increased its imports.
The Agricultural Trade Early Warning and Relief Expert Committee of the Ministry of Agriculture and Rural Affairs issued the "2023 (Spring) Report on the International Agricultural Products Market and Trade Situation", pointing out that with the recovery of domestic feed grain consumption demand and the decline of corn prices in the international market, China's corn imports may increase in 2023 . The channel for exporting Brazilian corn to China has been opened up, and Brazilian corn will occupy an important position in the import market in the later stage.
In the USDA supply and demand report for March 2023, China’s corn imports in 2022/23 are expected to be 18 million tons, the same as in February, and 17.7% lower than the 21.88 million tons in 2021/22.
3. China's purchase boom drives up US corn prices
The latest export sales report from the U.S. Department of Agriculture shows that U.S. corn export sales are extremely strong, with net sales reaching 3.1889 million tons, a 125% increase from the previous week and the highest level in 22 months.
The U.S. Department of Agriculture predicts that U.S. corn exports in 2022/23 will be 46.99 million tons, a year-on-year decrease of 25.1%.
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