Grain markets jittery as China cancels maize orders

Global grain markets have fallen following several large order cancellations of maize from the US to China in the past week.

The Foreign Agricultural Service, part of the US Department of Agriculture, announced on 27 April that private exporters had reported the cancellation of sales of 233,000t of maize for delivery to China during the 2022-23 marketing year.

This followed on from 327,000t being cancelled on 24 April.

See also: What’s the outlook for UK cereals and oilseeds markets?

Chicago maize futures dropped by $11.91/t (£10.75/t) last week to close at $230.31/t (£184.68/t) on 28 April for the July contract.

A large supply of cheap Brazilian maize coming to the market is also creating competition for US maize.

US maize exports were at a 15-week low of 400,000t last week, according to trader Frontier.

Peter Collier, senior adviser at CRM AgriCommodities, said the cancellations took some wind out of the sails for maize markets.

Mr Collier said: “Corn has slipped away and has allowed wheat to fall even further. Quite a lot of corn market support had been built around the emerging strength of US export pace, and most of that had been driven by Chinese purchases.”

Knock-on effect

So far this year US corn export commitments to China have risen to 8m tonnes from about 4m tonnes last year, and losing some of this is having a knock-on effect for wheat markets, which have dropped back in Europe and the UK, as well as the US.

UK feed wheat futures opened at £198.15/t on Tuesday 2 May, down by £7.35/t on a week earlier.

Grain trader ADM Agriculture said UK wheat prices had been following the weaker global trend and had been pressured by a continued lack of demand, both domestic and export, as cheap Brazilian maize imports into the EU undermine wheat values.