According to the latest data from the U.S. government’s Department of Agriculture (USDA), Chinese demand for U.S. corn and soybeans is strong. Traders also estimate that the recent surge in Chinese purchases will cause Washington to raise its export estimates for these two agricultural products.
The USDA announced on September 11 that for the week ending September 3, the United States exported a total of 1.608 million tons of soybeans to China and 1.137 million tons of corn to China.
According to another data release on the same day, U.S. private exporters returned exports of 262,000 tons of soybeans to China, the sixth consecutive day of announced sales to the world’s largest buyer of soybeans.
Corn is critical to China’s hog, dairy and poultry industries. As China faces its first real corn shortage in years, the country has also been increasing its imports of U.S. corn. The sharp spike in corn prices is the latest in a series of headwinds facing China, including devastating swine fever, the New Canopy outbreak that has unnerved international suppliers, and alarm bells ringing about a widening food supply gap, among others.
Arlan Suderman, chief commodity economist at broker StoneX, said, “The trade reflects expectations that the USDA will lower its harvest estimates for soybeans and corn this year and raise its demand estimates due to China’s recent purchasing spree.
As part of the first phase of the U.S.-China trade agreement signed in January, China pledged to import $36.5 billion in agricultural products from the U.S. annually. China’s imports totaled just $8.559 billion in the first seven months of the year, according to U.S. Bureau of Statistics trade data.
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