Published on: 14:36PM Apr 21, 2010
There has been a great deal of news regarding the potential for corn imports for China from the United States in 2010. As far as Allendale is concerned starch/protein from the US is making its way into China in the form of “distillers dried grain with solubles”.
China has displaced Canada as the number two importer of US “DDGS” with Mexico as the number one importer. In 2009 China imported from the US 661,320 tonnes (18.9% of the world market) of containerized DDGS vs the previous year’s 97,940 tonnes. The 661,320 tonnes of DDGS is comparable to 26 million bushels of corn. It is estimated the 661,320 tonnes of DDGS in 2009 may increased to 2 million tonnes in 2010, the equivalent of 78.69 million bushels of corn.
We must be reminded the crude protein of DDGS is in a range of 25%-30% vs crude protein content of 8.8% for corn and 48% for soybean meal.
Has the increased DDGS imports reduced China’s appetite for soybeans to be crushed into soybean meal and soybean oil? Not so as with 20.5 weeks remaining in the 2009/10 marketing year China is expected to import 43.5 million tonnes of soybeans vs 41.1 million tonnes the previous marketing year.
Swine numbers within China are up, cattle the third largest since 2006 and fluid milk imports are up a staggering 50% in one year.
We can explain to you historically China does not import corn until the month of February but the floor trade is of the opinion with China’s corn production down 6.6% in the last year, it is only a matter of short time when China will be forced to import corn.
What do you think, will China import US corn to feed its growing population? What impact has China local auctions of corn had on the world marketplace?
We welcome your questions and comments.........Joe Victor
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