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| The 40 MMT figure you are referring to is obtainable. The average of 2016&2017 was 3.445 million bushel of imports by China and at that time the U.S. had around a 50% share or 1.725 billion bushel. 40 MMT is 1.470 billion bushel and with their hog herds building back up and even with South America taking a higher share of the export market, it is still possible to reach that level.
I look at the roughly 750 million bushel larger commercial corn long position from 3-3-2020 to 6-2-2020 - possibly - being tied to commercials holding long positions for future sales to - possibly - China. The futures and options market can be used to offset higher futures prices and with the expectations of a large U.S. corn supply this fall, they could be covering futures price advances on the board and waiting to lock in cash basis levels when they tend to be wider than current levels. This will also be around or after the November election.
They could have covered their freight costs when crude oil was trading under $30 a barrel as an offset to higher freight costs as well.
Watch for exporters and/or exporter terminals to start making calls to producers then look for cash export sales to be announced soon thereafter.
An example of this was an exporter contacting some of my customers a couple weeks ago with a better than posted cash wheat basis here in KS which could easily be tied to corporate saying - go get the basis risk removed by tying up cash bushels even if with just a basis contract. China has purchased some HRW recently.
Just some thoughts to ponder.
Edited by Citi Farms 6/19/2020 13:41
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Is China looking to buy?
