“The U.S. Department of Agriculture on Wednesday unveiledcorn export sales to China of 680,000 tons, as well as 132,000 tons of soybeans. That’s on top of a 1.36-million-ton corn export sale to China reported Tuesday, marking the Asian country’s largest one-day purchase from the U.S. since July.”
The Bloomberg article noted that, “China is buying up record amounts of American corn to feed a hog herd recovering from African swine flu. The purchasing spree has rocketed the crop to multiyear highs, raising concerns about higher food prices. Money managers have been betting on a rally, with bullish wagers on corn near the highest in a decade.”
The Bloomberg article added that, “Soybean futures have been supported by China seeking more U.S. beans after top exporter Brazil suffered dry conditions that delayed planting and then downpours that slowed harvesting. Trucker protests over pay have also caused delays at a key export hub in Argentina, a key supplier of oilseed products.”
And DTN Ag Policy Editor Chris Clayton reported this week that, “Looking at the next 18 months to two years of global grain and oilseed demand, Archer Daniels Midland Co. executives on Tuesday said they see an environment of heavy demand that will bring more acres into production.”
The DTN article stated that, “Responding to a question on longer-term demand for grains and oilseeds, [Juan Luciano, ADM’s CEO] said ADM sees ‘an environment of real demand, real effective demand’ going forward because customers do not have a lot of inventory and have been ‘hand-to-mouth’ with buys.
‘So, we see this is going to take 18 to 24 months for these supply-demand balances to be rebuilt,’ Luciano said. ‘We see these conditions subsisting for the next couple of years, even with farmers … trying to play more because I think the prices will bring more acres into production. But we need those extra acres right now.’
Meanwhile, Reuters writers Karl Plume and Hallie Gu reported this week that, “China has bought ‘roughly 200 million gallons’ of U.S. ethanol for the first half of 2021, matching its previous record for annual imports of the corn-based biofuel, Archer Daniels Midland Co Chief Financial Officer Ray Young said on Tuesday.”
The Reuters article indicated that, “Imports of 200 million gallons would eclipse China’s previous annual record of 198.1 million gallons in 2016, according to U.S. Census Bureau trade data.”
“China has not traditionally been a large importer of ethanol, but tightening supplies of domestic corn used to make the biofuel coupled with a wide spread versus U.S. prices spurred the need for imports,” the Reuters article said.
Keith Good is the social media manager for the farmdoc project at the University of Illinois. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily FarmPolicy.com News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.
Bloomberg News reported this week that, "China’s hog population rose 24% in the year through May and has now almost fully recovered from the recent resurgence in African swine fever, according to the country’s agriculture ministry."
Late last week, Reuters writer Karl Plume reported that, "Chinese state-owned importers bought at least eight cargo shipments of U.S. soybeans on Friday, or at least 480,000 tonnes, the country’s largest U.S. soybean purchases in 4-1/2 months, two U.S. traders familiar…
Financial Times writers Hudson Lockett and Thomas Hale reported this week that, "Hog futures in China have fallen to record lows as mass slaughtering of pigs prompts fears that the world’s second-biggest economy faces a deluge of pork."