China bought 369,000 tonnes of US corn, the Agriculture Department said on Thursday, confirming the second big sale of US corn to China since late April and the single largest purchase by Beijing since 2001. Chicago Board of Trade May corn futures, up more than 6 percent since the first purchase of 115,000 tonnes was confirmed on April 28, fell 5-1/4 cents to $3.66-1/2 a bushel on Thursday. The sales were already factored into the market.
The purchases by China, the world's second-largest corn consumer after the United States, come at a time when Beijing has been selling reserves to tamp down rising prices. Traders and analysts said the purchases were primarily for feedmakers in China, adding there has been no sign yet that the Chinese government was building state stockpiles.
"What we have now is ad hoc purchases by feedmakers," said grains analyst Dan Basse of research company AgResource Co in Chicago, adding that any purchases by China to build its reserves could lend a bullish tone to CBOT corn futures. Traders and analysts polled by Reuters estimated imports in the 2009/10 (Aug/Sept) and 2010/11 marketing years to range from 700,000 tonnes to 6 million tonnes. The April 28 purchase was the first by China in nearly four years. There has been speculation that China has bought as many as 15 cargoes of US corn, totalling 825,000 tonnes to 900,000 tonnes.
US Agriculture Secretary Tom Vilsack told Reuters the purchases of US corn by China showed signs of improving trade ties between the two countries. "I think it's an indication of a strengthening trade relationship and an understanding that we got a quality product at an affordable price, which is what trade is all about," he said.
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