Corn prices supported the intention of China to buy a large batch

2019-03-14 12:08:44
Machine translation
Corn prices supported the intention of China to buy a large batch

Yesterday, corn futures in Chicago rose 0.9% to 144,56 $/t on the news about the intentions of Chinese state-owned company Sinograin to buy 1-3 million tonnes of U.S. corn delivery from the West coast USA in may-July. Probably, this purchase provided for by the terms of the trade agreement between the US and China, which will be concluded before the end of March.

 

Purchase of corn in the U.S. at current prices will mean that China will pay 10-15 $/t more than in Ukrainian corn.

 

According Agricensus, now on the West coast corn prices are 193,25 $/MT FOB PNW, which is about 25 $/t higher than the price 168,75 $/MT FOB Ukraine. But the freight cost by $10/t lower than that of Ukraine.

 

Ukraine in 2018, has become the main supplier of corn to China. In the total imports of 3.52 million tonnes, the share of corn from Ukraine made up 3.52 million tons, from USA – 312 thousand tons as a result of trade dispute China in 2018 has reduced the corn imports from the United States at 59%.

 

Despite significant demand from public companies, the import of corn in China is strictly regulated by quotas that are currently set by the government at the level of 7.2 million tons, of which the share of state-owned importers is 60%. Company Zhengbang Group is one of the largest feed producers, asked the government to reduce the quota.

 

Ukrainian corn always have an advantage over us due to the absence of GMOs. Last week Ukraine exported 770 thousand tons of corn, and in General in the season to 17.6 million tonnes, which is 70% higher than the corresponding figure last year.

 

Until the end of the season it is still possible to export 10-11 million tons of corn. It was expected that 2-3 million tons, will become China, 2-3 million tonnes of the EU and 1 million tons India. Domestic prices for corn dropped to 170 $/t FOB, which allows it to compete with the American grain, however, Argentine corn has a lower price.