China’s quarantine agency suspended issuing permits to import US dried distillers’ grains, an ethanol by-product known as DDGS, according to three trading executives whose applications were denied. Permits were halted because the Chinese government deems DDGS a high risk of containing MIR 162, a genetically modified strain of corn that China hasn’t approved, said sources who asked not to be identified.
Corn “is down today on the back of that Chinese news,” Dave Norris, an independent grain broker in Harrogate, England, said by e-mail. “It seems to put resolving the MIR 162 issue even further away down the line.”
The price for corn for delivery in July dropped 0.9% to $4.5475 (€3.35) a bushel at 6:12am yesterday on the Chicago Board of Trade.
This followed a fall of 1.4% last week, a fourth weekly decline, and touched $4.47 (€3.29) a bushel on June 6, the lowest since February 14. Prices are down 12% since the end of April.
China is the largest buyer of DDGS, a livestock feed that is produced when corn is stripped of starch when making ethanol. While US. corn shipments to China plunged amid restrictions on the MIR 162 variety, imports of DDGS continued to rise because some port officials had been lenient, said Sylvia Shi, an analyst at Shanghai JC Intelligence. China was the third-biggest importer of US corn in 2012-13, after Japan and Mexico.
Futures also fell on signs that US crops are developing in good condition. The US Corn Belt may see sufficient moisture in the next two weeks with “no lasting heat or drying,” helping maintain “excellent growing conditions” for most areas, QT Weather said.
The US harvest, the world’s biggest, may climb to a record 13.939 billion bushels in the 2014-15 season, according to a Bloomberg News survey of analysts. The USDA is scheduled to update its forecast on June 11.