Downward projection for Chinese corn import demand
Corn production in MY 2021/22 is adjusted to 272.6 million metric tons (MMT), up 11.9 MMT from last year owing to higher planting area despite slightly lower yields, said the team.
At the same time, corn and sorghum imports are expected to remain at near record levels despite China’s tariff rate quotas (TRQ) remaining unchanged, they forecast.
The FAS report sees China’s sorghum imports increasing in MY 2021/22 due to price advantages and China’s recent buying spree.
While corn prices have softened leading some feed mills to return to more corn in their rations with less wheat and rice, southern feed mills report difficulty sourcing adequate volumes of sufficient quality corn and continue to mix alternative grain, noted the publication.
Chinese corn import demand
The outlook also estimates a lower projection in Chinese corn import demand to 20Mt, 6Mt below official US Department of Agriculture (USDA) WASDE estimates.
“Although USDA’s Export Sales Report indicates that China has committed to buying 12.3 MMT of US corn for MY 2021/22, by the end of calendar year 2021, 80% has yet to be shipped. Instead, the shipping schedule shows China turned to Ukrainian corn in the fourth quarter of 2021.
“China bought 8-10 boats of Ukrainian-origin corn, equaling to 480,000-600,000 MT, at $330-335 per ton delivered with duties paid. These purchases are expected to arrive in China in the first quarter of 2022 and traders estimate Ukraine could ship 5 MMT of corn to China from what is expected to be a record 2021 Ukrainian crop.”
Weighing in on the USDA FAS report was CRM Agri: “If the regional FAS office is correct, then US export sales look on track to only just meet expectations, and US stocks remain ample. A lot of support in markets is on the basis of Chinese demand but as this outlook diminishes, support will too.
“With corn markets having been bullish for some time now amid expectations for an ongoing strong US export campaign, [these estimates have] the potential to reverse this bullish sentiment unless demand picks up.”
