China makes its largest ever purchase of U.S. corn
Far behind on its “phase one” commitments with the United States, China bought 1.76 million tonnes of U.S. corn, its largest purchase ever of American corn and also the largest sale of U.S. corn to any buyer in three decades, said the USDA on Tuesday. It was the second major corn purchase by Chinese importers in four days.
The newest purchase was worth $232 million, based on futures prices in Chicago. Private exporters also reported the sale of 129,000 tonnes of soybeans worth $42 million to China. Both transactions call for delivery in the marketing year that opens on September 1. Formerly the top customer for U.S. agricultural exports, Chinese buyers prefer to make purchases in late summer or fall because U.S. prices tend to be lowest at harvesttime.
On Friday, exporters reported the sale of 1.365 million tonnes of corn worth $180 million and 320,000 tonnes of U.S. wheat worth $63 million for delivery to China. More than half of the corn, 765,000 tonnes, was for delivery this summer and the rest was for delivery in the 2020-21 marketing year.
In the “phase one” agreement that calmed the China-U.S. trade war, China said it would buy $36.6 billon of U.S. food, agricultural, and seafood products this year. The Peterson Institute for International Economics says China imported $7.5 billion of those products in the first five months of the year, based on Chinese data.
The largest sale of U.S. corn on record was 3.72 million tonnes to the Soviet Union on Jan. 9, 1991, according to USDA. No corn sale exceeded 1.7 million tonnes in the following years so Tuesday’s sale to China is the largest in 29 years. Congress passed a law in 1973, prompted by the “Russian grain robbery” of 1972, that requires exporters to promptly report large sales.