Any suspicion of a down day in corn today was quickly erased on new speculation that China will once again be a major buyer of US corn, possibly importing a far more corn than originally expected before farmers here at home can gain any traction on next year’s crop.
The US Grains Council made the announcement today just as corn futures surged to new highs in response to already-strained supplies.
According to a report published just this afternoon by The Wall Street Journal, the worlds most populous nation may purchase as much as three million metric tons of corn in the 2010-11 marketing year.
Thomas Dorr, president of the US Grains Council, says: “After reviewing the figures with a number of sources, I believe it is possible that China will purchase another two to three million tons.”
The 2010-11 marketing year concludes August 31st.
Any more corn China is to purchase will come in addition to the 313,700 tons the nation has already purchased from the United States.
What continues to drive the global demand for grains are, among other factors, the changing eating habits of large Asian populations.
In China, for example, grain is fed to the livestock, which is similarly in high demand because of the surge in middle-class meat consumption taking place across China. Consequently, China’s appetite for corn may remain strong for the foreseeable future.
In this regard, it’s amazing what a difference a single year makes.
Just twelve short months ago, China made what is considered its “first significant purchase” of US corn in fifteen years.
In retrospect, that purchase of 1.5 million tons may ultimately prove a drop in the bucket compared to what China may ultimately need in the very near future.