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China grain buying to be more strategic

An ag economist says grain producers will need to practice strong risk management while watching the markets this growing season.

Cobank’s Kenneth Scott Zuckerberg tells Brownfield China’s aggressive U.S. grain purchases will likely continue.

“However, we see China being a lot more price sensitive in their purchases rather than buying into an accelerating price environment,” he said.

He said China’s limited grain ending stocks previously forced them to be an active buyer but now they can be more strategic. Zuckerberg said the combination of China’s sporadic buying and weather swings will create a volatile grain market.

“And what our recommendation to clients is, this means having ample and excess liquidity is important and practicing strong risk management will be key to financial success,” he said.

Zuckerberg said China’s buying will likely continue to be fueled through 2022 by its growing swine herd and increasing population.

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