(Posted Mon. Nov 4th, 2013)
Nov. 4: Lower grain prices have prompted a bevy of overseas buying, the U.S. Grains Council reports. Corn prices have fallen to a three-year low amidst huge and better than expected harvest reports. Recently, the U.S. Department of Agriculture reported net corn sales of 1.3 million metric tons (51.2 million bushels), and the bulk of the new sales are destined for unknown destinations, accounting for 428,000 tons (16.8 million bushels) of corn.
Couple that with last week’s announcement of more than 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 percent of Korea's total imports. This made Korea a prime target for U.S. Grains Council reengagement.
In October, USGC 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 Korean feed industry purchased 510,000 tons (20 million bushels) of U.S. corn—its 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."
On Friday, when USDA releases its first supply-and-demand estimate in two years, we can expect to see what we saw in September – an export estimate for the 2013 crop that remains far above that for 2012. September’s estimate for the 2013 marketing year was 490 million bushels more than 2012’s drought-reduced total corn for export.