- China has bought more corn this year as part of the U.S.-China trade deal.
- Stockpiles of corn made by Chinese farmers are growing smaller, leading to increased interest in overseas buying of the grain.
- Overall corn production is up, as better crop conditions lead to the potential for a better harvest.
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As Chinese stockpiles of corn dwindle, those farmers are looking to buy the grain from overseas for their supply — and that's good news for US farmers.
The reserves created by Chinese farmers are starting to run low after the Chinese government ended a price-guarantee program for grain farmers in 2016.
Since January, according to The Wall Street Journal, front-month corn futures on the Dalian Commodity Exchange have risen 27% to about 2,306 yuan ($329) a metric ton.
It's also cheaper for these farmers to buy corn overseas. While China is expected to raise their corn production this year, it won't be enough to keep up with the demand.
Earlier in July, the USDA announced China purchased 1.762 million tonnes of corn for delivery in the 2020-21 marketing year beginning on September 1, according to Reuters. This was done to help meet purchasing goals laid out by the U.S.-China trade deal, signed in January.
Along with the increased demand for corn, the crop itself is doing better this year. According to the USDA, planted corn that falls under the "Good" or "Excellent" category is a 55% and 17%, respectively. At this time last year, those numbers were 47% and 11%.
This news comes one year after a particularly difficult summer for American farmers.
Record rainfall combined with an African Swine Flu surge that swept through the Chinese hog population led to a weak corn crop with less buyers than normal.
The Link LonkJuly 30, 2020 at 11:28PM
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China is buying more corn. That's good news for American farmers. - Business Insider - Business Insider
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