China has changed tactics and has been waiting for market lows to buy additional feed grains, reports CoBank Knowledge Exchange.
Last year China bought record amounts of U.S. feed grains sending prices soaring.
CoBank predicts China’s accelerated demand for grains is expected to continue, “however, the current U.S. grain run has entered a new phase marked by significant price volatility, and China is leveraging that volatility to its advantage.”
“China will remain an active buyer of U.S. grain through at least the 2021-22 marketing year,” said Kenneth Scott Zuckerberg, lead grain and farm supply economist with CoBank.
In addition to waiting for price dips, China is placing more orders for upcoming harvests.
China has already contracted for 10.7 million tonnes of new crop corn and three million of soybeans.
“Barring cancellations, these orders lend confidence that U.S. feed grain exports to China will continue to be strong during the next six months,” said Zuckerberg.
So far, the U.S. has exported 57.1 million tonnes of soybeans, corn and grain sorghum to China.
Last year in that same period it was 15.5 million tonnes and in 2019 it was 7.9.
The United States Department of Agriculture estimates China’s hog slaughter will increase to 520 million this year compared with 460 million last year.
The University of Missouri Food & Agricultural Policy Research Institute has increased its estimate from 520 to 630 million hogs which would be an increase of 21 per cent which means a similar increase for feed.
China’s pork prices have been declining so much that the government has begun to buy pork to put into its reserves.
