US corn net export sales reach record high on firm Chinese buying

Houston — US corn net export sales hit a record high of 7.44 million mt in the week ended Jan. 28, a sharp increase from 1.85 million mt the previous week, data from the US Department of Agriculture showed Feb. 4, on the back of strong Chinese buying.

The total US export sales was within market expectations of 6-7.8 million mt, a source told S&P Global Platts.

Exports to China surged to 5.86 million mt in the week ended Jan. 28, from 76,000 mt a week ago.

Total commitments, which are outstanding sales plus accumulated exports, ended the week at 56.12 million mt. This was 146% higher on the year and up 85% from the five-year average. China accounted for 17.7 million mt, Mexico 11.01 million mt, and Japan 7.55 million mt.

Outstanding sales fueled most of the export growth, rising to 36.09 million mt, surging 209% on the year and 22% on the week.

The CIF New Orleans basis in barges for the current month shipment remained stable. It continued to hover between 72 cents/bu and 78 cents/bu against month 1, as it has for the last few weeks, sharply higher compared to the range seen last year, with the last week value up 50% on the year.

The outright price for CIF New Orleans in barges followed the rise in CBOT corn futures. CIF New Orleans rose 5.4% in the week ended Jan. 28, settling at $6.065/bu, while the CBOT March (H) settled at $534.5 after a 6.8% rise on the week.

The biggest destinations for outstanding sales included China, with 11.56 million mt, followed by Mexico at 5.94 million mt and Japan at 4.61 million mt.

China made up the bulk of net sales at 79% of the total. Net sales represent new export sales, and thereby the strength of the corn market. The primary reason for the demand spike is the recovery of hog herds following mass culling in 2019 from African swine fever. Corn is used as feed for pigs.

The previous high for net sales was during the week ended Feb. 14, 2019. The total was 6.03 million mt, with Mexico the largest buyer at 1.43 million mt. Demand was more evenly spread among buyers at the time.

Unknown sales accounted for 8.28 million mt of outstanding sales and total commitments. For net sales, 403,000 mt were unknown. These represent exports to destinations not yet specified.

Corn is the primary feedstock for ethanol production in the US and the main competitor for dried distillers grains in feed rations.