Yesterday saw the release of the anticipated weekly US export sales data. Following last week’s strong sales, this report was always going to make impressive reading, said UK based oilseed and grain market specialists, CRM Agri.
US weekly net corn sales of 555.9KT for 2020/2021 were up noticeably from the previous week and from the prior four-week average.
For 2021/2022, net sales totaled 5.69MT, primarily for China at 5.64MT, they noted.
Although China has taken a pause so far this week from making further new crop purchases, markets remain alert for further rapid sales and 5.64MT is a very impressive headline figure, said the analysts.
Rumors of Chinese corn order cancellations
This week saw heighted concern and speculation about statements made by China and their corn demand.
Bloomberg reported that China is looking to decrease some corn imports amid concern that imports have skyrocketed, with it citing sources saying several feed mills in China were planning to cancel their US cargoes.
The media outlet reported that China was looking to restrict imports of US corn into ‘free trade zones‘ for blending into animal feed, those zones do not count towards an official annual purchase quota.
The speculation led to a fast sell-off in Chicago corn markets before making a recovery.
‘As China has been making efforts to curb speculation, either in cryptocurrency or physical commodity markets, global corn markets had been under pressure. Suspicion increased that China might not require all the export sale tonnage currently booked in. However, yesterday saw the release of the anticipated weekly US export sales data, with little evidence of old crop cancellations,” Peter Collier, senior market advisor, CRM Agri, told FeedNavigator.
China has been a large driver behind the 2021 rally in corn prices, making sustained and substantial purchases of US corn for not only 2020/21 but also the 2021/22 season. Estimates for Chinese corn and wheat demand has become an increasingly significant driver behind global grain prices, noted CRM Agri.
Separately, EU rapeseed values have lost over €60/t over the past two weeks following global vegetable oil prices going lower despite supported crude oil values, said the CRM Agri team.
‘Although it is still early in the US soybean growing season, conditions are looking good and crop development is ahead of average. Additionally, although water levels in Argentina are a concern, greater South American availability is also placing some pressure on oil and meal markets’
‘Large price premiums exist to take into account supply risk, and for now, both with rapeseed or soy, markets are cautiously becoming more confident in supply,” remarked Collier.