China goes on US grain buying spree under the radar during government shutdown

China and other big grain importers embarked on a corn and soybean buying spree during the US government’s 16-day shutdown last month, taking advantage of a lapse in mandatory reporting of their deals, data showed on Thursday.

Figures from the US Department of Agriculture, which had halted collection of required weekly grain export sales information during the shutdown, showed purchases in the three weeks to October 24 had far outstripped analysts’ expectations, despite weeks of market chatter about unusually large purchases.

“It does play out the notion that when nobody is watching, the Chinese will be in to buy,” said Citigroup futures specialist Sterling Smith.

Sales of corn and soybeans for the three-week period both topped 4.5 million tonnes, exceptionally high even on a pro rata weekly basis. A slump in prices that took benchmark US corn prices to their lowest in three years probably also spurred buying.

All sales to export US grain must be reported to the USDA on a weekly basis, and larger one-off deals must be reported daily. This system was instituted following the 1972 “great grain robbery” in which the Soviet Union quietly arranged a series of big export deals that drove up US prices.

But that system went on hold during the shutdown. Only on Thursday was the USDA able to release tabulated sales made during the three weeks up to October 24, publishing the data in a single batch rather than as three separate weeks.