China: China seen a central spot of changing world S&D balance
China is the central spot of a changing world supply & demand balance, H. M. Gauger GmbH reported earlier in September.
In January-July of this year the country emptied its national reserves, selling 62 mln tonnes of rice and 50 mln tonnes corn in the domestic market. The domestic corn price is USD100,- per ton higher than the landed China price of U.S. yellow corn. After emptying the Brazilian corn and soybean surplus, the Chinese turned to the U.S. for purchases of almost 30 mln tonnes of beans, 10 mln tonnes of corn, 5.5 mln tonnes of sorghum and 1.1 mln tonnes of wheat (present totals of the crop year). Barley was purchased in Argentina, Canada, France and Ukraine. New purchases, most of all soybeans and corn, as reported almost every day.
Consumption is driven by the remarkable recovery of the Chinese economy, the rebuilding of the pig herd after the ASF crisis, and most likely unreported poor crops. It looks as if Chinas needs will really reduce the world surplus of grains and oilseeds.