Chinese buyers have contracted this week to buy 1.347 million metric tons of U.S. corn, the latest large daily purchase in an effort to lock down supplies after the Russian invasion of Ukraine cut off exports from the country.
“China is going to get product wherever they need it from and with all the unrest … with Ukraine and Russia, they’re going to go to where they need to go to get corn,” National Corn Growers Association First Vice President Tom Haag tells Agri-Pulse.
The purchase is split between 735,000 tons for delivery in the current 2021-22 marketing year and 612,000 tons for delivery in the 2022-23 marketing year, which begins Sept. 1. That is China taking care of an immediate need for corn after the Russian invasion stopped planned shipments of millions of tons of corn from Ukraine to Chinese feed companies as well as the Chinese assuring future supplies, says Eric Relph, a broker with the Iowa-based CommStock.
Brazil’s second — and largest — corn crop, popularly called the “safrinha,” is generally expected to be strong this year, but farmers still need good weather conditions over the next few weeks and there is some uncertainty there.
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“The general market perception is that China was actively trying to purchase about 6 million metric tons of corn from Ukraine,” said Relph. “Those purchases were still necessary and really, you get to a place where Brazil doesn’t have that kind of volume until the safrinha crop comes out of the ground.”
USDA announced a similar daily grain sale on April 11 in which China purchased 1.02 million tons of U.S. corn. Of that total 680,000 was for delivery in the current marketing year and 340,000 tons for 2022-23. About a week earlier — on April 4 — Chinese buyers purchased 1.084 million tons of U.S. corn, divided between 676,000 tons of old crop and 408,000 tons of new crop.
Last week, the Ukraine Ag Ministry said the country’s farmers will only be able to export about 17 million tons of corn for the 2021-22 marketing year, 6 million tons less than USDA’s latest forecast of 23 million tons.
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