U.S. Corn Supplies Seen by Oil World Rising on China Move

July 30th, 2014

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Category: Grains, Oilseeds

(Businessweek) – U.S. corn supplies will be even bigger next year if China keeps import curbs on a genetically modified variety of the grain, Oil World said.

China’s Import Inspection Authority has requested that U.S. exports of dried distillers’ grains with solubles, a corn-based ethanol byproduct known as DDGS, be certified free of the genetically modified MIR 162 corn variety, the Hamburg-based researcher said in an e-mailed report. China, the world’s second-biggest corn consumer, rejected several cargoes of the grain from the U.S. this year after reporting finding the unapproved variety in shipments.

“Supplies on the U.S. market will increase correspondingly next season if China, so far the leading importer, continues to curtail imports of corn and its byproducts on GMO issues,” Oil World said.

Corn prices on the Chicago Board of Trade, the global benchmark, have tumbled 21 percent in the past year as U.S. farmers are projected to harvest the second-biggest crop on record. Inventories in the U.S., the top producer and consumer, may be 45.76 million metric tons at the end of 2014-15, the largest in nine years, according to the U.S. Department of Agriculture.

The drop in prices means more corn may be used to produce ethanol, implying large supplies of DDGS, Oil World said. China also has plans that U.S. ethanol plants must register before exporting DDGS to the country, according to the report. The U.S. Grains Council said last week China should approve MIR 162, allowed for use in the U.S. since 2010.

U.S. exports of DDGS jumped 56 percent in the first five months this year to about 5 million tons, Oil World said. China accounted for 2.4 million tons of the total, compared with purchases of 944,000 tons in the same period last year, according to the report.

 

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