China renewed its robust buying of US corn, further pressuring already tight global supplies of the grain. In just the past four days, China purchased 3.9 million tonnes of US corn for delivery in the current marketing year, marking the largest corn sales to China since January.
The USDA currently projects corn ending stocks of 1.5 billion bushels (38.2 million tonnes) in 2020/21, but Gro data indicates that figure is too high and Gro’s Yield Forecast Models for corn in Brazil and Argentina bear very close watching.
With cash corn prices in China north of $11.50 per bushel, US corn still represents a bargain. On the other hand, corn futures on the Dalian Exchange have come off their highs. This suggests the market anticipates either additional supplies or lowered demand. A resurgence in African swine fever could well reduce feed demand, but it is hard to see where fresh supplies would come from.
Problems are already besetting South America’s corn crops. In Brazil, a major delay in harvesting soybeans has set back planting of the safrinha, or second crop, of corn, which accounts for most of Brazil’s production. Late planting typically results in weaker yields for the safrinha crop. In neighboring Argentina, the corn crop has battled high temperatures and dry conditions that have dragged down yields ahead of the upcoming harvest.
This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.