Recent estimation depicts China’s corn import to touch 7 million metric tonnes. The estimates are as per the demand and supply projections released by their government. It has reached the highest level since May 2016.
China Corn Imports at Annual Record
The data from the US Agricultural Department shows that China has pledged to import 9 million metric tonnes of corn. Further, if everything does get shipped, then it will be the largest ever import of corn by China until date. Also, the USDA mentioned that private exporters sold 350,000 tonnes of corn to China. This was for delivery in the market year 2020-21. Furthermore, this is the biggest sale of corn to China since the previous deal for 596,000 tonnes on 1st September. The Chinese imports indicate that they want to ensure food security and deal with the shortage of woes in the country.
Rains, Storms Damage Crop in China
The Chinese government increased its import estimates of corn for both 2019-20 and 2020-21. This might have been due to the tightening supply situation in the country. To elaborate, a typhoon hit the northeastern part of Chinese corn production. The said typhoon might reduce by 5-10 million tonnes of production, according to Zhang Dalong, an analyst with COFCO future. As the domestic output falls, China has increased its imports from major producers like the US, thereby helping the soybean and corn farmers in the country.
The corn futures market is in a volatile situation right now. The impending US Elections, the impact of the hurricane Derecho and the rising number of coronavirus cases in the US will all affect the corn estimates. The corn market will look to the Stock Report to be released on 30th September and the early harvest yield results for guidance regarding the prices. Overall, the corn estimates have remained profitable in the short run, but the bigger picture looks bearish. Chicago Board of Trade for corn and soybean futures rose on 25th September, after declining for the four previous days.
In conclusion, the Chinese import of corn will benefit the farmers in the US. But, the uncertainty regarding the elections and the virus, does make the corn estimates look volatile.