Chinese buyers made another large purchase commitment for U.S. corn this week, snapping up 1.7 million metric tons for delivery in the 2020-21 marketing year, according to a daily export sale report released Thursday by the USDA.
The Thursday announcement follows on the heels of a Wednesday sale of 680,000 tons and a Tuesday sale of 1.36 million tons. Both of those export sales to China were also for corn to be delivered in 2020-21.
“China is rebuilding its (swine) herd and its feed stocks and it’s looking to American corn to do it and we’re really happy to see that,” says Lesly McNitt, director of public policy and trade for the National Corn Growers Association. “We’re proud of the quality and abundant products that we produce and the sustainable product that we produce. We’re encouraged to see that China’s opening its markets to U.S. corn to rebuild its feed stocks.”
USDA also announced Thursday a sale of 213,600 tons of corn to “unknown destinations.”
Outstanding sales of U.S. corn – the amount of purchases that have not yet been shipped – to China as of Jan. 21 totaled about 5.9 million tons, according to the latest weekly trade data out of USDA’s Foreign Agricultural Service. At this time a year ago, that total was just 200 tons.
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China needs the corn because it needs feed for its livestock – especially swine as it rebuilds its herd after the devastation from African swine fever outbreaks, according to USDA’s Foreign Agricultural Service. China wants to restock its reserves of both the grain and feed, but the country is drawing down on existing stocks as it boosts imports.
“China’s feed demand will remain robust in (the 2020-21 marketing year) with continued swine restocking and livestock sector growth contributing to an overall feed demand increase of 15.6 million metric tons (above levels in) 2019-20,” FAS analysts in Beijing said in a report released this week. “Many industry contacts forecast a 23 million metric ton corn deficit in 2020-21. To meet demand, the gap will be filled by reserve auctions, substitutions, and imports.”
The FAS analysts in Beijing are predicting China will import a total of 22 million tons of corn in 2020-21. That’s significantly higher that the official USDA forecast of 17.5 million tons.
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