China Keeps Buying U.S. Corn, How Many More Purchases Could Still Be On the Way?

China continued to buy U.S. corn this past week, and analysts say there might be more purchases to come, especially if prices dip and China sees it as an opportunity to buy more.

Since mid-March, China has purchased 2.5 million metric tons, or 100.29 million bushels.

“Our group is thinking it could be as many as 2 million more metric tons,” says Jim McCormick of AgMarket.net. “So, that would get us close to 4 million.”

McCormick says if those expectations turn into reality, that would also bring China’s total purchases of U.S. corn so far to around 18 million metric tons.

“That would be the low end of the estimate of where the industry is,” says McCormick. “The real question is, are they going to buy more than that, considering as much uncertainty there is with the pricing.”

Read More: Why is China Buying So Much U.S. Corn Right Now?

McCormick describes China as a “value price type of buyer.” That’s been proven the past couple weeks, with any breaks in corn prices resulting in China stepping in to make more purchases of U.S. corn.

“I think every kind of dip we get in the market, I would not be surprised to see China come in and step in and get a little bit more coverage done as they’re just worried about that Safrinha crop in Brazil maybe falling a little bit short,” McCormick adds.

Whether China will buy more corn or not, this year’s price action is proving to be very different compared to last year. Steve Kell of Kell Grain says that’s why growers need to shift their marketing mindset for 2023.

“In 2022, we saw three major events that could drive prices of South American drought that affected Brazil and Argentina, the war starting in Ukraine, which put the market into a spin, and then some drier conditions in the U.S. Midwest,” he says. “So, we had this kind of trifecta of things that push prices higher. Maybe all of those things will happen again this year, but the Brazilian South American yield is better than we thought the war is getting to be old news. And so I think farmers need to dial down our expectations, we are not going to if we’re aiming for ‘22 crop prices in ‘23, we’re going to wind up missing the mark.”

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