Corn Prices Reach Near-Decade High, Wheat Forecast Falls
China is ramping up corn purchases from the U.S. as Russia’s invasion of Ukraine snarls grain exports and puts spring plantings in doubt.
The world’s top importer scooped up 200,000 tons of corn two weeks ago for shipment in the season beginning Sept. 1, USDA data showed last week. That is the most since December. While China was only the fourth-largest buyer for the week, the sale was notable since the Asian country had been purchasing supplies from Ukraine. China was also the leading buyer of U.S. soybeans, picking up more than 800,000 tons.
Sales of U.S. corn to all global destinations of more than 2 million tons came even as prices traded around the highest levels since the all-time peak in 2012. Purchases are rising after China fell short of its 2021 commitments to buy U.S. commodities under the phase-one trade deal.
Overall, demand for corn from the U.S., Brazil and Argentina soared in the past weeks as the war escalated, but purchases have slowed down recently, said Andre Pessoa, head of the Brazilian forecaster Agroconsult. Brazil will ship around 2 million tons of corn in March and April, which is very unusual for those months, he said.
In its latest monthly world supply and demand report, the USDA forecasts that 2022 world exports of wheat are expected to drop 3.6 million metric tons from last month’s estimate of 206.7 million tons, accounting for a disruption in vessel transportation out of Black Sea ports.
Imports from large buying nations like Egypt and Turkey are seen declining for both corn and wheat world-wide, the USDA said, largely due to the disruption of Russian and Ukrainian supply.
Traders expect reports later this month to show the adjustment of trade flows to other nations in response to the war, likely showing new partnerships among the Americas, Europe, Australia, and Canada, according to research firm AgResource.
Sources: Bloomberg, Wall Street Journal