China’s extensive recovery in hog production during 2020 led the country to import large quantities of grains such as maize (corn), wheat, and sorghum to be used as animal feed. This led most grain prices to surge to almost a decade high.
US maize exports, for instance, are expected to reach a record high of 72.4 million tonnes in 2020/21 (+60.3% y-o-y), and stocks to fall to the lowest level in seven years at 28.12 million tonnes (-42.3% y-o-y). This is primarily driven by China’s robust demand amid reduced competition from Brazil and Ukraine, as unfavourable weather conditions are to weigh on supplies. As of 30th June, the CBOT maize price was settled at USD 235.8/MT, 66.3% higher than the same period the previous year.
China is expected to remain an active buyer of grains through the 2021/22 season, despite a higher production anticipated for the new marketing year. The continued growth in pork production is likely to maintain Chinese grain imports at high levels.
China has agreed to have 10.7 million tonnes of maize for the 2021/22 crop to be delivered after harvest. This suggests that US feed grain exports to China will continue to be relatively strong, at least until the end of 2021.