NASHVILLE, TN – Weak domestic grain prices could limit China’s commercial appetite for imported corn even as political commitments create potential opportunities for U.S. agriculture. Retired USDA economist Fred Gale says falling wheat prices and increased feed use of lower-quality wheat have pressured Chinese corn values.
Gale says Chinese corn averaged about $8.77 per bushel in early August, with additional pressure possible as the new crop arrives. Wheat purchases under China’s minimum-price program could provide some support, but weak downstream demand remains a concern.
For U.S. producers, economics alone currently offer limited encouragement. Cheap domestic grain and substitute wheat reduce China’s need for imported corn, while some Chinese processing plants have also been idled.
Trade policy remains the wildcard. China has committed to buy at least $17 billion annually in U.S. agricultural products through 2028, in addition to 25 million metric tons of U.S. soybeans annually.
President Xi Jinping is expected to visit the United States in September, and recent state soybean buying has already been linked by traders to that meeting. Additional agricultural purchases could emerge even if Chinese grain fundamentals remain weak.
Farm-Level Takeaway: China’s weak grain market limits commercial demand, but September diplomacy could still generate additional purchases of U.S. agricultural products.