China's corn crop in question?
Aug 30, 2013
Corn traders are starting to talk about the potential losses to the corn crop in China. Along these same lines, the USDA announced that China has purchased 120,000 metric tons of new-crop milo, possibly their biggest purchase ever. Is this another clue that Chinese corn demand is set to surge??? Keep in mind last year they were able to use wheat as substitute for short supplies of corn. Considering how much wheat they have imported and the production problems they have had, I suspect wheat won't be available to bail them out this time around. I might be a little early to the party, but I am starting to believe the USDA could be grossly underestimating Chinese corn import demand. Remember, for the first time ever they are now importing corn from Ukraine and Argentina. My question is why would they be opening up new trade lines if they didn't believe they were going to need more and more supply. Eventually China become a "quantity" buyer of corn rather than simply a "price" buyer...is this the year? Here at home there continues to be talk of big yields being harvested down south and that the bushels will be working their way up North to help ease supply shortages. The question is how soon? Considering a large portion of the crop is being harvested at extreme moisture levels (26-28%) there is certain to be some drying delays. Let's also not forget river traffic has been delayed as of late with several spots along the Illinois and Mississippi River having to close due to low water levels. The Corp of Engineers has had to go in and do some dredging to get things going again. The problem is without some heavier rains soon river traffic could be somewhat limited..... To receive my daily report click the link below. Thanks