US sells record amount of corn to China as tensions rise

Chinese buyers booked their single biggest-ever purchase of US corn, extending their flurry of large US purchases even as tensions between Washington and Beijing rise.

The US Agriculture Department said yesterday that private exporters sold 1.937 million tonnes of corn to China for delivery in the 2020/21 marketing year. That topped the previous biggest deal to China of 1.762 million tonnes, reported just two weeks ago.

In a separate report, the USDA said soybean sales to China rose to 1.925 million tonnes in the week ended July 23, the biggest weekly total since November 17, 2016.

The recent purchases place China closer to the ambitious US$36.5 billion (RM154.75 billion) target for imports of US farm goods this year set in the Phase 1 trade deal. Analysts and traders say that target may be achievable, but it is looking like a stretch.

The corn sale reported yesterday was valued at around US$325 million, based on new-crop prices at the US Gulf. China's American farm purchases amounted to US$6 billion through May ― the latest data available ― up just 9.1 per cent from the same period in 2019 and 31 per cent below 2017's level.

China yesterday accused the United States of stoking a new Cold War ahead of its presidential election in November. US Secretary of State Mike Pompeo also called the Chinese Communist Party “the central threat of our times.”

Rising tensions have already slowed Chinese purchases of US soybeans this week, US Soybean Export Council CEO Jim Sutter said during a virtual town hall with agriculture leaders yesterday, citing sources in China.

“They're worried that there could be a disruption in the implementation of the Phase 1 agreement. That uncertainty is not good for future purchases,” Sutter said.

Near the close of trading yesterday, Chicago Board of Trade corn and soybean futures were slightly higher.