Thursday, 17 May 2012

China buys 900,000 tonnes of US corn

China purchased 900,000 tonnes of US corn in the eighth largest one-day corn sale ever, with most of the supplies for shipment in the next marketing year that begins September 1, the US Agriculture Department said on Wednesday.

Corn futures late last week plunged to a 14-month at the Chicago Board of Trade.

China, the No 2 global corn producer, likely took advantage of the drop in prices to augment domestic supplies, said Jefferies Bache analyst Shawn McCambridge.
"Each time we are trading down toward recent lows, China will extend coverage," McCambridge said.

"It reflects that they are buying based on price, not on need.

I don't expect them to chase prices higher." The bulk of the sale, 660,000 tonnes, was previously reported as sold to unknown destinations, USDA said.

The sale called for 180,000 tonnes for delivery this marketing year and 720,000 tonnes for delivery in 2012/13.

All of the corn for 2011/12 delivery and 480,000 tonnes of the 2012/13 total were reported previously as sold to unknown destinations, meaning 240,000 tonnes are new sales.
The sale was the largest since an April 27 announcement of 1.56 million tonnes of corn sold to China and unknown destinations, with Wednesday's sale equal to a purchase last October of 900,000 tonnes of corn to China, USDA data shows.

China is expected to harvest a record corn crop this year, an official think tank said on Wednesday.

The country, which is also the top global importer of soybeans, has stepped up corn purchases amid a growing demand for animal feed.

China has purchased about 4.8 million tonnes of old-crop US corn while USDA expects the country to import 5 million tonnes in the 2011/12 marketing year and 7 million tonnes in the 2012/13 marketing year.

By law, exporters must report promptly the sale of 100,000 tonnes or more of a commodity to the same destination in one day.

Sales of smaller amounts are reported on a weekly basis.

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