China hungry for feed grain

China continues to aggressively seek imports.

How global grain buyers would respond to the recent sell-off in international markets was always going to be telling.

Would importers view it as a buying opportunity to lock up supplies at a discount to mid-January values?

Or would they wait for even cheaper prices after the frenzied run-up in grain prices driven by screen jockeys in the United States and Asia?

The answer could not have been more emphatic.

China stepped in and bought about 6 million tonnes of corn from the US as they continue to aggressively seek imports.

The Unites States Department of Agriculture reported on Friday that China booked 2.1mt of US corn, the largest-ever single sale to the Asian juggernaut.

That lifted China's weekly purchases of US corn to a colossal 5.85mt, amounting to nearly 10 per cent of the country's forecast corn exports for the 2020/21 marketing year.

Global grain markets rocketed higher on the news the world's most populous country continues to aggressively extend its record large feed grain imports while grain prices are hovering around seven-year highs.

Forecasts for how much grain China will import in the 2020/21 marketing years are expected to be lifted following last week's purchases.

The USDA's ag attaché in Beijing is forecasting China will import 22mt of corn for the marketing year, sharply higher than the USDA's official forecast of 17.5mt.

The increase would see China become the largest corn importer in the world, sharply higher than its previous largest annual imports corn imports of 7.8mt, set in the previous season.

Although Beijing's move to effectively ban Australian barley imports were designed to punish, Australia's farmers are directly benefiting from China's insatiable appetite for feed grain imports.

China's hunger for feed grain imports has also spilled over into Australian wheat and sorghum.

Exporters are reporting strong demand from Chinese buyers for Australian sorghum.

Sorghum prices have been steadily creeping higher on container export sales to China.

Southern Queensland sorghum is now demanding a premium above wheat.

Sorghum was $5-10 higher last week to $325 delivered into the Downs compared to wheat at $315.

As much as 600,000 tonnes of Australian wheat was shipped to China in January, some of which will be used for feeding.

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