China imports five million tonnes of corn since March

China may have bought as much as 5 million tonnes of corn since March and traders expect the world's second-largest consumer to shop for more, as it stockpiles the feed grain following a slide in global prices from record highs. Chicago Board of Trade corn has lost about a fifth of its value since hitting a record high of $7.99-3/4 a bushel on June 10 after US government shocked the market with a forecast for a potentially record-large corn crop.
"Given the attractive price, we believe that China may have bought quite a lot over the past days, a total volume of at least 5 million tonnes since March," said a Beijing-based industry source. "Our balance sheet shows that China needs to import at least 10 million tonnes in 2011/12. Even with acreage increase of corn at home, the volume is needed to cover domestic consumption, along with needs to replenish state stocks and enough to cool speculation at home."
Another industry source in China, who declined to be named, said the country may have already purchased 5 million tonnes or on its way to reaching that figure. The US Agriculture Department confirmed the sale of 540,000 tonnes to China on Thursday and another 300,000 tonnes were sold to an unknown destination, which traders said was China. The sales announced by the USDA was in addition to around 2 million tonnes the nation has already purchased this year.
"Last week and this week China has been buying US corn and we expect they will continue to take more at these prices which is a very bullish factor," said Kazuhiko Saito, chief commodities analyst at Fujitomi, a Tokyo-based commodities trading company. "Our estimate is that they will easily take 5 million tonnes of US corn this year and most of the buying will take place in July and August," said the analyst, whose estimate was in line with that of the US Grains Council. US corn futures rose for a second straight session on Friday as China's purchases buoyed the market, which is on track for a weekly gain, snapping a three-week losing streak.