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Mid-day Commentary, Jun 12

Jun 12, 12:59 pm | Mid-day Commentary

Chinese policy shift alters feedgrain market – Late this morning, China announced that it considering cutting it minimum price loan for corn by 10% – or roughly $.96/Bu and offering sizeable subsidies to rail cash corn into the livestock areas of SE China. If correct, this would be an important structural change in China’s feedgrain market. China is awash in corn and wants to stimulate demand and reduce its Gov’t stockpiles of corn which are estimated at 86 MMTs and rapidly growing. If China lowers its corn loan and more importantly heavily subsidies rail movement of corn, it would have an important negative impact on the import of sorghum, barely and other grains such as DDGs. As ARC has been advising clients for weeks, movement is afoot in China…

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