The price slump has sparked a flurry of Chinese purchases of corn from the United States as the world’s biggest buyer of the grain struggles to make up for a slow start to its import program, traders and analysts say.
The latest deal, announced by the US Department of Agriculture (USDA) on Friday, saw China buying 204,000 tonnes of US corn, its eighth confirmed purchase in the last nine working days.
US corn futures fell 7.3% in February and hit a seven-month low on March 10, before China its buying spree.
The price drop, combined with uncertainty over exports from rival Ukraine and better shipping conditions along the Mississippi River, has made US supplies the most attractive to Chinese buyers.
A deal to export Ukrainian grain from the Black Sea was extended this month, but Kyiv and Moscow disagree on how long the extension will last.
US corn export sales to China totaled 2.245 million tonnes for the week ended March 16, the third-highest weekly total on record, USDA data show. Since then, Chinese buyers have closed deals for another 832,000 tonnes of corn.
Since the start of the 2022/23 marketing year in September, China has committed to buying 7.637 million tonnes of corn from the US. This compares with 12.123 million tonnes in the same period a year earlier.
For the entire 2021/22 marketing year, China purchased 14.592 million tonnes of corn from the US, about two-thirds of its total imports.
With Argentina’s harvest potential severely reduced by a devastating drought, traders say the US will remain the dominant supplier to China until Brazil’s second corn crop, or “safrinha”, is harvested in June.
China, which imported only 7.58 million tonnes of corn in the 2019/20 season, was previously dependent on domestic production to meet local demand.
It quickly increased imports as soybean production became a greater national priority, said Darin Friedrichs, co-founder of Sitonia Consulting in Shanghai.
