USDA confirms Thursday's reports China bought US corn

The USDA said Friday that Chinese buyers purchased 300,000 mt of US corn, confirming reports that state-owned agribusiness Cofco was buying barges in the US Gulf and trains to ports in the Pacific Northwest.

The purchase comes after weeks of rumours that China’s government could source large volumes of corn to appease US demands to address the trade balance ahead of a new trade deal.

The price of barges surged by 5c/bu ($2/mt) on Thursday before easing back down as Cofco snapped up parcels, according to market sources.

News of the purchases sent corn futures to their highest level in more than two weeks.

“Cofco Chicago is buying barges out of the US Gulf (for April/May delivery pushing prices) up 6 c/bu ($2.40/mt). Also buying May PNW trains. Heard 111 (C/bu over May futures) traded,” said one market source on Thursday.

It is unclear whether the purchases by Cofco are part of a wider state-sponsored buying scheme, although market sources point out that there are cheaper alternative origins for corn.

"We have not seen a sale of more than 300,000 mt to China in years," said Terry Reilly, a market analyst with Futures International.