Speculation is mounting that China will need to bring in much more corn than many anticipated as frequent flooding and two typhoons have damaged crops. Images and videos showing wind-flattened corn have been making the rounds.
A senior trader at Louis Dreyfus Co. in China told an online conference Thursday that China may need to import as much as 30 MMT of corn next year to ease tight domestic supplies, according to a report from Bloomberg. That would be a dramatic increase from USDA’s latest projection for China to import 7 MMT of corn in 2020-21. But whether those purchases come from the U.S. or other major suppliers like Ukraine is up for debate and likely depends on Phase 1 progress.
The Bloomberg story goes on to point out that if China imports 25 MMT of American corn, the U.S. stocks-to-use ratio will remain historically high. But if China buys upwards of 35 MMT of U.S. corn, stocks-to-use would drop significantly.
The market rose above the 200-day moving average overnight and extended gains to the highest level since late March on stepped-up fund buying amid speculation China will continue to aggressively buy U.S. corn after recent crop damage and given its Phase 1 commitments.