CHICAGO (Reuters) – The U.S. Department of Agriculture on Wednesday defended its latest monthly forecast of China’s corn imports, a figure that surprised analysts given that corn sales to China have already outpaced the USDA’s estimate.
“Keep in mind that export sales … do get canceled at times,” said Mark Jekanowski, chairman of the USDA’s World Agricultural Outlook Board, speaking at an online meeting for users of USDA data.
The USDA in its Oct. 9 World Agricultural Supply and Demand Estimates (WASDE) report left its forecast of China’s corn imports in the 2020/21 marketing year at 7 million tonnes, matching its forecast for 2019/20 and unchanged from its previous monthly report.
Weekly USDA export data shows that sales of U.S. corn to China for the 2020/21 marketing year begun Sept. 1 reached 10.5 million tonnes by Oct. 15, although actual shipments totaled only 1.7 million tonnes.
China has ramped up purchases of feed grains including U.S. corn in recent months amid tightening supplies and worries about food security, and as it rebuilds its massive hog herd following a devastating swine disease.
China’s voracious appetite for grain has been a key driver in global markets, helping to lift benchmark Chicago Board of Trade corn futures <Cv1> above $4 a bushel for the first time in a year.
On Sept. 17, China set its 2021 tariff rate quota for corn at 7.2 million tonnes, unchanged from 2020. But China’s government is expected to issue more import quotas and buy millions of tonnes of additional corn in the new crop marketing year, industry sources have told Reuters.
Yet, until China changes its quota, the analysts behind the USDA’s WASDE reports – seen by traders as the gold standard for global crop forecasts – are unwilling to speculate.
“One of the things we try not to do is forecast changes in policy, including changes in policy by foreign countries,” Jekanowski said.
(Reporting by Julie Ingwersen; Editing by Cynthia Osterman)