70 Percent of Chinese Corn Stocks Can't Be Used

October 26, 2017 01:06 PM
 
 

Last month, China made the announcement it would use ethanol in its gasoline across the country by 2020 as a way to strengthen corn demand and decrease smog.

Andy Shissler of S&W Trading thinks there will be some “real substance” on the market in the next three years during China’s expansion period.

“Any time they have a short crop, they’ll be here for U.S. corn,” he said. “We get a lot of talk about the stocks that they’re sitting on over there—I would say at this point, probably only 30 percent of their stocks in that big pile is usable at this point.”

Shissler has heard reports that 70 percent of the Chinese corn stocks are “past its date” and can’t be used.

“They don’t have quality corn. They wouldn’t have an ethanol plant built to use it,” he said.

Chinese corn prices aren’t making the farmers happy, so Shissler said the government might have to make a subsidy payment in order for farmers to plant corn in 2018.

“Something’s got to give from their government, and that’s why they’re getting in the ethanol business,” said Shissler.

Hear Shissler’s full thoughts on AgDay above.

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Comments

 
Spell Check

kerrlee
Scottsboro, AL
10/27/2017 12:39 PM
 

  Guess I learned some stuff from this. Corn has a use-by date for ethanol. They probably can't use it if it's GMO either. Ethanol production requires a special plant. Ethanol production used to be a cottage industry here in the South. This story sounds like internet BS. I hear lots of stuff too. I would feel obliged to verify it before teaching it.

 
 
Sesame Sam
Tombstone, AZ
10/27/2017 01:18 PM
 

  You be surprised how much poor quality corn can be used to make just ethanol. The problems is the DDGs that will be use as a feed. There is where the big limitation comes into play. As far as the b/s about 70%, is just one more thing somebody pulled out of the A$$. We (U.S.) knows little about the Chinese government let alone how big the pile is let alone the quality. I have seen estimates (on just the size of pile), anywhere from 85mmt to 110mmt. So if you can use that wide estimate to your advantage (it be about a billion bushels spread) then have at it...

 
 
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