China’s appetite for Ukraine corn slows as ‘normal’ service resumes

Ukraine exports to China are returning to ‘normal’ levels as the post-harvest peak buying period slows and despite a potential spat developing around China’s trade relations with the US, Black Sea trading sources said Tuesday.

The apparent deterioration in Sino-US relations and reports that US cargoes had been substituted for Ukrainian corn does not appear to have galvanised any uptick in buying, with the three panamax-sized cargoes heard being sold to China in the last few days described as ‘normal’ buying.

“China is always buying corn, and they’re used to buying commodities at the lowest prices, so they do it just before the harvest,” one market source told Agricensus.

Ukraine’s corn is typically harvested around September and October, with China’s buying kicking off from around the same period, according to data from the Ukrainian government.

Exports to China roared from 6,081 mt in October to hit 532,017 mt in November – the latest month for which official data is available.

Market sources put Ukraine corn exports over the five months from August to December since the start of the 2017/18 marketing year surpassing 800,000 mt with total marketing year exports set to top 2 million mt.

That compares with 1.6 million mt in 2016/17 – a relatively quiet year versus the 2.4 million mt exported in 2015/16 and 4.2 million mt that went to China in the 2014/15 marketing year.

At least three panamax cargoes have been heard sold to China in the last week, with ADM, Ameropa and Nibulon all said to be amongst the sellers.

“It was trading at a crazy pace, but it has slowed, the pace has lowered now,” a Black Sea grains broker said.

Market sources have seen little reaction from China to the announced investigation into US sorghum exports or the potential deterioration in Sino-US trade relations which some had expected to fire fresh demand for feed corn.

Earlier this month, China revised upwards its corn imports to reflect the anticipated fall in sorghum supply and reports have been heard of US corn cargoes being held up on GMO concerns.

“Three or four panamaxes have traded to China recently, but it’s nothing unusual,” a third source said.  

The US has also been at the epicentre of corn supply in recent weeks, as the US Gulf and Pacific Northwest emerged as the most competitive origin globally.