For dairy producers in the United States, the news about China canceling a portion of their corn orders for 2023 is possibly the best news they've heard in a while. Last week, feed prices plummeted after the US Department of Agriculture released several announcements stating that China had canceled 562,800 metric tons of US corn orders during the last week of April. Though many dairy producers have already secured their corn contracts, the drop in feed prices is welcomed news.
“Declining corn futures prices could slowly result in reduced feed expenses...Many dairy producers have also contracted to buy at least some of their future needs for soybean meal, grain, and byproducts, so they will not benefit from today’s lower prices until they’ve used up their contracted tonnage" said Sarina Sharp, an analyst with the Daily Dairy Report.
The Reason
The cancellations, which also weighed on wheat and soybean futures, highlighted concerns about weak demand for U.S. agriculture exports due to massive harvests and more competitive prices in Brazil. Brazil is set to surpass the US as the world's largest corn exporter, as their production is expected to hit 124.9 million tons (up from 10.4% compared to last year).
China's Corn Purchase and Cancellation Timeline
March 14, 2023 - Private exporters announced the sale of 24.1 million bushels of corn for delivery to China during the 2022/23 marketing year, which began September 1.
March 15, 2023 - Private exporters announced to USDA the sale of 26.3 million bushels of corn for delivery to China during the 2022/23 marketing year, which began September 1.
March 16, 2023 - Private exporters announced the sale of 25.2 million bushels of corn for delivery to China during the 2022/23 marketing year, which began September 1.
March 17, 2023 - Private exporters announced to USDA the sale of 7.5 million bushels of corn for delivery to China during the 2022/23 marketing year, which began September 1.
March 21, 2023 - Private exporters announced the sale of 5.4 million bushels of corn for delivery to China during the 2022/23 marketing year, which began September 1.
March 22, 2023 - Private exporters announced to USDA the sale of 7.0 million bushels of corn for delivery to China during the 2022/23 marketing year, which began September 1.
March 23, 2023 - Private exporters announced to USDA the sale of 4.8 million bushels of corn for delivery to China during the 2022/23 marketing year, which began September 1.
March 24, 2023 - Private exporters announced to USDA the sale of 4.8 million bushels of corn for delivery to China during the 2022/23 marketing year, which began September 1.
March 28, 2023 - Private exporters announced to USDA the sale of 5.4 million bushels of corn for delivery to China during the 2022/23 marketing year, which began September 1.
March 29, 2023 - Private exporters announced to USDA the sale of 8.0 million bushels of corn for delivery to China during the 2022/23 marketing year, which began September 1.
March 30, 2023 - Private exporters announced to USDA the sale of 7.0 million bushels of corn for delivery to China during the 2022/23 marketing year, which began September 1.
April 13, 2023 - Private exporters announced the sale of 12.9 million bushels of corn to China. Of the total, 58% is for delivery during the current marketing year, which began September 1. The remainder is for delivery in 2023/24.
April 14, 2023 - Private exporters announced the sale of 15.0 million bushels of corn to China. Of the total, 64% is for delivery during the current marketing year, which began September 1, with the remainder for delivery in 2023/24.
April 24, 2023 - Private exporters announced the cancellation of 12.9 million bushels of corn sales from China that was originally for delivery during the 2022/23 marketing year, which began September 1.
April 27, 2023 - Private exporters announced to USDA the cancellation of 9.2 million bushels of corn that was originally bound for China during the 2022/23 marketing year, which began September 1.
