China buys U.S. corn
China bought about 1.5 million metric tons of corn Tuesday, likely mostly from the U.S., two executives familiar with the matter said separately Wednesday.
China had been widely expected to re-enter the corn market as U.S. corn prices, reeling due higher-than-expected supply estimates, fell 20% since early September.
Soaring feed demand and depleted corn reserves have brought China back to the global grain market after a 15-year hiatus, with corn imports to the world's second-largest corn consumer in August reaching the highest monthly volume in 10 months.
China Grain Reserves Corp., or Sinograin, China's official grain stockpiling agency, made the purchases, the executives with a state grain processing and trading company said.
The sharp erosion in global corn prices last month came amid sharply higher Chinese spot prices. Corn prices in the major processing province of Shandong have risen more than 30% since the start of the year.
China bought 1.6 million tons of corn last year, mostly from the U.S., setting a pattern of aggressive buying on dips in prices in order to replenish stockpiles.
China is projecting a record grain harvest this year of likely above 550 million tons, but analysts say China's import appetite could rise even more sharply in coming years, to around 9 million tons a year.
The China Feed Industry Association said last month that by 2015, China will likely face a 15 million-ton shortfall in corn output.
Sinograin spokesman Cheng Bingzhou said he was unaware of Tuesday's deal and declined to comment further.
The exact amount of the purchase from the U.S. wasn't clear. One executive said the deal was for at least 900,000 tons.
Sinograin is also in the market for soybeans and soyoil. The company bought about 100,000 tons of soyoil and 700,000 tons of soybeans from either U.S. or South American suppliers, one of the executives said.
China is targeting 2 million tons of soybean purchases, the second executive said.
U.S. soybean prices tumbled about 18% last month, weighed by optimistic supply forecasts and a gloomy global growth outlook.
China may have bought its latest soyoil imports from Argentina. About 200,000 tons of Argentinian soyoil was slated for export to China this year, Agriculture Minister Julian Dominguez has said.
The South American nation hopes to step up corn exports to China in early 2012 after finalizing a market access agreement by the end of this year, Dominguez said.
-By Chuin-Wei Yap and Zhoudong Shangguan, Dow Jones Newswires; 8610 8400 7704; email@example.com.
(END) Dow Jones Newswires
October 12, 2011 06:04 ET (10:04 GMT)
DJ UPDATE: China Buys 1.5 Million Tons U.S. Corn -Executives->copyright