The USDA is forecasting a strong market for U.S. corn, according to the World Agricultural Supply And Demand Estimates released Friday. According to WASDE, the United States will export approximately 2.15 billion bushels of corn in 2006/07, an increase of 125 million bushels compared to last year.
Ken Hobbie, U.S. Grains Council president and CEO. Explains export sales continue to exceed the trade's expectations - surpassing 1.1 million tons (43 million bushels) for the week ending May 5. More than half of these sales were to Japan, Mexico, South Korea, Taiwan and Indonesia.
U.S. corn is on its way to Indonesia for the first time in approximately two years. Two Panamax shipments of U.S. corn are expected to arrive in Cigading, Indonesia, later this month and a third is due to reach the port in June, for a total of 167,270 tons (6.58 million bushels). In addition, USDA load inspection reports indicate more U.S. corn will soon be en route to Indonesia. Although Indonesia has imported U.S. corn in the past, none of the 400,000 tons (15.7 million bushels) of corn they imported last year was from the United States.
In addition, the U.S. Grains Council/Beijing office reports that the first private purchase of U.S. corn has been made by Chinese importers. The two shipments - totaling 100 metric tons (3,937 bushels) each - are currently in Hong Kong awaiting final import permits to be issued.
The Council views the small purchase as a test shipment by the tariff rate quota holders. Importing a small amount will give these buyers a chance to check China's import procedures as well as the country's general sanitary and phytosanitary inspection procedures.
Currently, China's annual corn demand and domestic corn production are both at about 130 million tons. Chinas' ability to produce more corn domestically is becoming more challenging and as China's corn demand continues to grow, we expect that they will begin to look for reliable corn suppliers like the United States.