The corn puzzle - one big piece floating around.
The agreement is, historically speaking, a fair amount of corn is being grown world wide. And a large reserve. But that doesn't tell you a lot. Some will go into the world trade, some won't or can't. But corn IS a more popular crop/feed globally than it used to be.
Here's the kicker. China is storing 100 MMT of it (@4 billion bu ?). First, subtract that from global inventory to get a better picture of where grain is distributed and chances of it coming on to the global market. China is saying it will be out of the massive storage of corn that it has in now - for corn. Don't confuse this with their other grain stores for strategic reasons. At least not yet.
The government purchase of this corn kept Chinese domestic grain price high. The problem is that if China begins to sell this corn [into their domestic market] in the next year the US is the most likely to feel it because we are their main export supplier. I will guess they will take their time because it doesn't serve their purposes to disrupt the global market and reduce production of a commodity they may very well need to depend on more in the medium term future. I expect they'll import corn at lower levels while disbursing stores gradually. [China is saying at least a year before starting to disburse stocks]
The other question is, what are the chances China will export corn? I'm going to guess the chances are low but not out of the question if it would gain them influence in coutries where they are after energy or to prop up N Korea and keep it from becoming chaotic from their current severe famine.
India has the same problem with wheat but the subsidy needed to get the crop investment down to world prices for export would be a killer ! I don't think they'll move much wheat now (subtract 1/3 to 1/2 from the global 'inventory', even if the quality is substandard). China faces a similar issue but they have more resources. Exporting would COST China.
Re: The corn puzzle - one big piece floating around.
wouldnt it seem reasonable for china, who purchases a lot of pork from us to expand their own pork production and feed this corn on a grand scale. what am i missing here?