USDA announced last Friday morning that private exporters had sold 500,000 metric tons of U.S. corn to China for delivery during the 2001-2002 marketing year.
The news of the sales, combined with the news China has canceled 1 million tons of corn export sales, should be very supportive for corn prices.
The sale brings U.S. 2001-2002 corn sales to China to 665,000 metric tons. No actual shipments have been made. USDA's most recent projection was that China would import only 200,000 metric tons of corn during 2001-2002.
U.S. exporters did not sell any corn to China during 2000-2001.
China Cancels Corn Export Sales
China has cancelled corn export sales of about one million metric tons, which were part of about 3.5 million tons sold at a tender in August, Reuters News Service reported last Friday.
An official at Jilin Grain Group (JGG), one of the country's two authorized exporters, told Reuters it had agreed on the cancellation of nearly one million tons with international traders. COFCO, the other authorized exporter, also cancelled part of its sales, he said without giving details.
The official said the contracts had been cancelled because prices had fallen too far since August and some of the contracts had reached their expiration date. The corn was not "washed out" by exporters – sold back to China at a lower price, he said. The sales were simply cancelled.
The cancellation came as a particular surprise because, until a few days ago, some saw Chinese corn offered for export at $100 per tonne, FOB, or even $98, for shipment by the end of December.
Editors note: Richard Brock, Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
To see more market perspectives, visit Brock's Web site at www.brockreport.com.