China has made some efforts in recent years to reduce its corn stocks. This will include the nationwide blending of ethanol with gasoline by 2020. According to the USDA, domestic corn consumption in China has already increased significantly in recent years and stocks are correspondingly smaller.
In April, the US Agricultural Attorney in Beijing estimated the maize outgrowths in the 2018/19 marketing year at 50.5 million tonnes. It should be 79.6 million tonnes in 2017/18 and 100.7 million tonnes in 2016/17. In 2018/19, it would be the smallest stock for eight years.
Perhaps even more significant is the impact on the world's final inventory. Assuming the estimate of the agricultural attache for 2018/19, the world's final stock would then be 186.35 million tons. Of that, China would only hold 27%.
That is considerably less than the 40% that are up to date. And it would be the smallest share of the world's final stock since 1972. The highest share was China in 1995/96 with 75% and the current 10-year value is 44%.
In comparison, here are some figures on the final holdings of the US: For 2017/18, the USDA estimates them at 55.435 millionTonnes and for 2018/19 to 41.35 million tonnes. This means that China's final stock could only be as big as in the US.
Text: HANSA Derivatives Trading GmbH /
