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China, Mexico on Record Corn-Buying Pace
USAgNet - 06/08/2021

U.S. corn prices recently have been above $6 per bushel and $14 per bushel for soybeans. Both are well above most prices since 2013.

According to the U.S. Grains Council, China's purchase of 10.744 MMT of corn (422.97 million bushels) for 2021/2022 -- more than three months before the new marketing year even begins -- sets a historic pace for U.S. export sales. Mexico, the second-highest U.S. corn purchaser, had also bought more than 1.808 MMT of corn (71.18 million bushels) for the new marketing year as of May 20.

Some of China's recent purchases of U.S. corn will likely go into the country's state reserves, but much will go directly to the feed and livestock industry, USGC reports.

"No one knows how much of China's corn imports are going into official state reserves, but the amount going into reserves may be just for annual replenishment rather than for rebuilding depleted reserves," said Bryan Lohmar, U.S. Grains Council director in China.

He said private stocks held by end users, however, are growing, prompted by the depletion of the temporary reserves built up in the early part of the last decade and sold off at auctions held every summer since 2016.

With these temporary reserves depleted, Lohmar said private end users are more exposed to supply shocks and, therefore, may be increasing their own private stocks and pipelines.

Lohmar said corn feed demand in China has also increased due to the expansion of poultry production and the Chinese government's aim to modernize its pork production. U.S. corn imports have been going directly to feed mills to support this demand.

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