Chinese corn market full of controversies

UkrAgroConsult

Article author:

Maryna Marynych

Grain Market Analyst

Ukraine has been the top corn exporter to China in recent years, but this changed after signing the trade deal between China and the U.S. in 2020 (so-called Phase 1) – the U.S. share in Chinese corn imports has begun to sharply expand, UkrAgroConsult reports.

China will continue active corn purchases, as it is restoring the hog industry hit by swine flu last year – according to the Ag Ministry of China, the country’s hog inventory has already been restored to 80% of its normal size.

Such an increase in imports indicates tight domestic supply that is also confirmed by growth in domestic corn prices. The corn futures price on the Dalian Exchange continues growing – it has exceeded a record USD 380/MT in U.S. dollar equivalent.

Demand from the main buyer will continue warming up prices. In addition, uncertainty is observed regarding the South American crop (due to late planting of soya), and U.S. crop forecasts have also been repeatedly lowered because of hurricane consequences.

UkrAgroConsult does not expect any corn price decrease (excluding minor adjustments) until January-February 2021.

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