Lower oilseed and grain prices have prompted a bevy of overseas buying. Corn prices have fallen to a three-year low, amidst huge and better than expected harvest reports. The USDA reported net corn sales of 1.3 million metric tons (51.2 million bushels) and more than a quarter million tons (9.8 million bushels) of new sorghum sales. The bulk of the new sales are destined for unknown destinations, accounting for 428,000 tons (16.8 million bushels) of corn and almost 176,000 tons (6.9 million bushels) of sorghum. Much of the rest of the purchases were sold to familiar faces — China, Japan and Mexico.
Couple that with the announcement of over 4.5 million tons (177.2 million bushels) of new corn sales during the weeks of Oct. 10, 17 and 24 and one can easily get a pulse for international demand at these prices.
However, market wires are abuzz with news that some importers have purchased U.S. corn for the first time in more than a year. Last year, the United States exported just 416,000 tons (16.4 million bushels) of corn to South Korea, which is less than 5% of Korea’s total imports. This made Korea a prime target for U.S. Grains Council reengagement.
In October, USGC Director in Korea Byong Ryol-Min led a high-level delegation through the United States focused on reinvigorating the strong U.S.-Korea agricultural ties. That trip has paid huge dividends. For the first time in 16 months, Korea’s largest feed manufacturer, Nonghyup Feed (NOFI) bought 70,000 tons (2.8 million bushels) of U.S. origin corn for March arrival.
Following the NOFI news, Council sources reported that the Korea Feed Industry purchased 510,000 tons (20 million bushels) of U.S. corn — the Korean Feed Industry’s first purchase in 13 months.
“It’s really exciting news to see Korea buying from the United States again,” said Kevin Roepke, USGC manager of global trade. “This week’s purchases alone eclipse what Korea bought from the United States last year.”
According to some traders, the narrowing gap between prices of U.S. corn and South American corn has resulted in Korean millers purchasing some U.S. corn again, which is of better quality.
“Upon return of the USGC October trip, Korea immediately began tendering for U.S. corn,” Roepke commented. “It’s great to see they were able to find and were satisfied with prices from the United States.”
Additionally, members of the Feed Industrial Group (MFIG) of Taiwan, one of the major buying groups in the country, recently announced a 60,000 tons (2.4 million bushels) purchase of U.S. corn for shipment late January/early February.
“This is the first Panamax shipment of U.S. corn purchased by MFIG in quite some time,” said USGC Director in Taiwan Clover Chang.