China farmer sales strong amid record 2021 harvest, state reserve auction lags

Chinese farmer sales of 2021/22 harvest of corn and soybeans picked up in recent weeks after a slow start this year whereas state-backed auctions of reserved grains stagnated.

As of the first week of December this year, Chinese farmers have sold a total of 65.5 million tons of rice, corn, and soybeans to agricultural companies, gaining 30% week on week, according to official government data.

Among the total volume sold last week, corn sales reached more than 26 million tons in main planting areas, up nearly 38% w/w, and soybean sales hit 1.13 million tons, up almost 23% from the previous week.

Despite that farmer sales have maintained at a rapid pace, the overall progress is still behind last year. By the same point in 2020, Chinese farmers had sold 82.75 million tons of rice, corn and soybeans, which was more than 26% higher than this year.

On the contrary, auctions of 73,186 tons of old crop soybeans by Sinograin achieved only 17% sales on Friday.

Another auction of imported corn only had a 31% sales rate of an offer of nearly 237,400 tons.

Even though auctions of state reserve seem unpopular in the Chinese domestic market at this stage, the volumes tend to pick up dramatically in the second quarter of the following year after the harvest season in China.

Chinese stockpiler auctions their reserves every year to balance market supply in China as annual domestic harvest runs out.