China backs US with biggest daily corn purchase in 26 years

China has bought 1.36 million mt of US corn in its biggest such purchase for 26 years, data from the USDA revealed Friday, after a raft of rumours has swirled around the market for several weeks.

A private exporters sales note, known as a flash sale, from the USDA confirmed the purchase of 1.365 million mt of corn by China, with 765,000 mt pulled from the current marketing year and 600,000 mt from the 2020/21 marketing year.

It is the biggest daily purchase of corn by China since December 20, 1994 and the eleventh biggest in history, according to USDA data.

The note also confirmed purchases of 190,000 mt of hard red spring wheat and 130,000 mt of hard red winter wheat from the 2020/21 marketing year.

“It was talked about earlier in the week. Good to see it actually happened later in the week,” Terry Reilly of Futures International told Agricensus, with the volume coming as the US marketing year enters its final two months.

“With cargoes not reported, the 60k here and there, we look for a range of 1 million to 1.3 million mt for the new crop for the upcoming export sales report,” Reilly said, referring to the regular weekly data on net sales that is typically published every Thursday by the USDA.

There have been rumours circulating of multi-million tonne purchases of US corn by China for several weeks but the biggest volumes to date had been two purchases of 200,000 mt reported in flash sales earlier in July.

The news came just hours after the release of the Casde, China's agriculture supply and demand estimates, flagged the acceleration of corn purchases under country's Phase One trade deal with the US.

The monthly report doubled the outlook for corn imports to 6 million mt. 

Corn futures, ahead of the release of the note, had been around $0.02/bu weaker for virtually all contracts covering the 2020/21 marketing year ahead of the release of the July update to the USDA’s influential Wasde report.

The private sales note saw futures regain around a cent before settling back again immediately following the data.

All US exporters are required to notify the USDA of any export activity for corn, wheat and soybeans of over 100,000 mt made in one day or of more than 200,000 mt made in one reporting period.