Porto Alegre, December 14, 2020 – The update of the monthly supply and demand report by USDA did not bring news to the US framework. Without changes in the numbers, the report ended up following what the market expected, and there were really no major indicators to be changed. However, amid the absence of new imports for the past sixty days, USDA brought a new rise in corn imports from China. The numbers continue to surprise the market and try to find a real motivation for this scenario of growing imports.
USDA will close the 2020 season in January with its production report. The January supply and demand report did not reveal any changes in projections for 2020/21 for the United States. Final stocks remained unchanged at 43 million tons, which is comfortable for the moment in the US market.
However, there was a correction in the projection of imports by China from 13 to 16.5 million tons in this business year, which ends in August. In 2020, China imported 7.8 million tons from locals, and USDA maintains 7.6 million tons. This increase in purchases until August is surprising, as it represents almost double the record of 2020. Certainly, there was more attention to the movement of corn prices in China regardless of other signs.
If we look at the supply and demand picture pointed out for China, we notice that the stocks of 190 million tons, without a doubt, do not reveal the need for imports even with some local price movement. However, as we have stated, this is the great conflict of information that exists about Chinese corn at this moment and that poses risks to market movements in the international environment. The contrast between the indications of immense stocks and the trend of record and growing imports may be showing a distorted piece of information.
Agência SAFRAS Latam
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