Developing demand for U.S. grain overseas
The big question is, will we see that again?
Last week, China bought six million metric tons of corn and more than 260,000 tons of soybeans. It comes after a near-record purchase of U.S. farm goods last year, off of which are adding support to market prices.
“I think what we’ve seen is since China’s been such a heavy player in the market, it’s helped to reduce our stockpiles this year and as a result we’ve seen prices move sharply higher in the last few months,” AFBF Chief Economist John Newton explains. “Corn is now sitting at around $5.30, soybeans sitting around $13.50, and that’s up 50 to 60 percent from where we were back in early August, and a lot of that is on the back of strong trade and export demand.”
China also purchased a record 200 million gallons of ethanol last week.
The Renewable Fuels Association calls China’s ethanol purchase a good start. According to CEO Geoff Cooper, “Having China open the door and return to those levels of imports of U.S. ethanol would absolutely boost margins and help rebalance supply and demand in the marketplace, and put a little more tightness into the market, which is something we could use right now.”