Monday, September 10, 2012

Record Corn Imports by China to Drive Rally, Rabobank Says

from, Bloomberg:

The biggest-ever imports of corn by China, the world’s largest livestock producer, may help sustain a record rally in Chicago that’s been driven by drought across the U.S. Midwest, according to Rabobank International.

Shipments may climb to 7 million metric tons in the year starting Oct. 1 from about 5 million tons this year, Daron Hoffman, Shanghai-based director of research, said in an interview. That compares with a U.S. Department of Agriculture forecast for a 60 percent drop to 2 million tons in 2012-2013.

Record imports by China may spur higher prices, lifting global food costs and forcing rival importers to cut purchases. China’s demand needs to be met by imports no matter what the price, according to Nathan Broders, director of feed ingredients at INTL FCStone Inc. Corn has rallied 24 percent to a record this year as the worst U.S. drought since 1936 slashed output.

Prices may be much higher in the second half of 2012 as China increases purchases, Hoffman said yesterday, without giving a forecast. His estimate for imports in 2012-2013 is higher than the USDA’s outlook because he sees a smaller increase in China’s output this year, he said in Shanghai.

Read More @ Bloomberg

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