China was back buying U.S. ag goods to start off the week, sending some mixed messages as the buys also came with cancelations.
USDA confirmed on Monday China purchased just over 1 million metric tons of new crop corn, but USDA also announced the country was canceling a buy of 280,000 metric tons of old crop corn.The major buy came on the heels of Beijing buying up 1.36 million metric tons of new crop corn last week.
Trade sources are also reporting China was buying corn from Ukraine and Canada for new-crop delivery last Friday.
AgriTalk host Chip Flory and Washington D.C. analyst Jim Wiesemeyer talked about China’s buying spree on the latest “Signal to Noise” podcast.
“They’re rolling some of their own crop purchases to the new crop, and I think a lot of that was expected,” says Flory. “But to see China react and take action as early in the process on the new crop as they are, there’s a problem, and that should be literally forcing other corn import and exporting countries like Japan, Mexico, other countries to jump in here, too, because you put your pencil on on a piece of paper, if this carryover goes much lower, plus you’re going to have such a demand in the fall of moving in this country, the capacity here is really going to be tight.”
Despite the buys, what’s moving markets continues to be Brazil’s safrinha crop and also recent rains in the Midwest. Most forecasters don’t see a major improvement in depleted soil moisture with one Brazilian ag consultant slashing the country’s corn crop estimate to 95.5 million metric tons, which is down almost 8-million metric tons from just last month.
