China appear to be playing their usual game in the corn market. Cancelling US orders, cancelling Ukraine orders, increasing the volume of unshipped US orders. Simply playing the game China is renowned for playing. The market speculation is starting to lean towards further defaults from China thus the S&D side of the US corn sheet is looking less tight than it was a couple of months ago. The million dollar question is, does China use the downward blip in US corn prices to buy more US corn.
The influence that China can have on US corn values does make one wonder exactly what level of hedging margin can someone like China make in the US futures market.
China has also taken about 30% of what barley has been exported out of the EU, roughly 600kt, in the current marketing year. Corn prices out of Argentina are still the cheapest in the world into Asia, even cheaper than US DDG. This may simply be an attempt by China to force US values lower to compete with S.American prices regardless of any trade agreements.
Sorghum values out of Argentina are roughly US$227 FOB river. This would equate to about US$310 FOB China. Using this value as a benchmark for our local prices it still indicates sorghum here could be worth as much as $320 ex farm LPP …. in bulk. With no boats in the stem the balance of the crop may need to go out in boxes. The additional costs associated with container packer and shipping needs to be considered which does erode bids locally to levels closer to, or slightly higher, than current bids.
Sovecon reduced its Russian wheat estimate to 75.4mt, still 1.9mt higher than the current USDA estimate.