Since mid-2020, China has purchased large quantities of U.S. grain due to accelerated feed demand, a strong currency, and less product being available for import from Brazil.
China will remain an active buyer of U.S. grain through at least the 2021/22 marketing year based on steady pork production and higher slaughter rates.
China’s accelerated demand resulted in record high grain prices that peaked in May and have since been extremely volatile.
CoBank sees this volatility continuing as China is now buying grain more opportunistically, i.e., on significant price weakness.
The current grain run has entered a new phase. An elevated period of price volatility coupled with a continued inverted forward curve means that elevators and merchandisers will require capital discipline and excess liquidity.
