Corn weakened as China finalized an anti-dumping tax on US DDG imports after a ‘year-long government probe.’ DDG importers will have to pay a 42.2 to 53.7 percent anti-dumping tax and an 11.2 to 12 percent anti-subsidy tax over the next five years. US DDG exports were valued at US$2.94 billion in 2015 with approximately 50% exported to China.
Negative news from China was followed by neutral weekly export sales at 755,002MT as they were within the 500,000-800,000 trade expectation. Corn sales are currently 64% of USDA’s whole-year expectation.
However, Record ethanol production was reported again this week at 1.049 million barrel per day, up 4.6% over last year and above last week’s 1.040 which was the previous record. While this continues to be supportive for US corn market, there is cause for concern since DDG’s are a co-product of dry-milled ethanol production and product consumption has lost a trade partner in China.
The USDA report showed slightly lower yields than expected at 174.6 bpa, moving production down with it to 15.148 billion bushels. Ending stocks are estimated at 2.355 billion bushels, another lower than expected number but ample supplies remain nonetheless.
Dry conditions forecasted for Argentina in the coming days are expected to help soy and corn crops after the heavy rains in late December and early January that reportedly left 10% of the central farm belt with excessive moisture. South American Crop Consultant Dr. Michael Cordonnier lowered his Argentine corn crop by 500,000 MT to 34.5 million MT. He details that “The earlier planted corn is past pollination and into filling the grain, so the earlier planted corn will not be impacted as much as the soybeans or the later planted corn.”