China’s record corn purchases have traders wondering if bump can last

Record purchases by China have sent corn prices soaring since the end of last year, leaving farmers and analysts pondering how long the surge can be sustained. Rampant demand from the world’s second-biggest economy has driven a fierce rally in grain prices in recent months. China has always been reliant on overseas markets for soyabeans to feed its animal herds. But the ramping up of imports of corn — where the country has previously aimed for self-sufficiency — has surprised analysts and traders. China bought a record 11.3m tonnes of corn last year, of which more than a third came from the US. In late January, the US Department of Agriculture announced that China had bought another 2.1m tonnes, the largest single sale to the country in history and the second largest on record. In response, global corn prices have raced above $5 a bushel — a near eight-year high. “This is a watershed moment for grain markets where new, unforeseen demand of that size was not expected,” said Kevin McNew, chief economist at Farmers Business Network, an online platform for US farmers. He added that at these prices “farmers will see some of the best profitability they have had in the last eight years”. China’s big purchases of corn come as the country rebuilds its hog herd after a devastating wave of African swine fever a few years ago hit its pig population...MORE