When USDA updated its Crop Production report and World Agricultural Supply and Demand Estimates on Sept. 11, a change USDA didn’t make might have caused the most head scratching.

When USDA compiled estimates for supply-and-demand balance sheets, China had already booked 8.8 million metric tons (MMT) of U.S. corn for import in 2020/21. That doesn’t include corn originating from Brazil, Ukraine or other locations. Still, USDA left its estimate of Chinese corn imports at 7 MMT.

World Trade Organization agreements include a Tariff Rate Quota (TRQ) to allow for low-tariff corn imports by China of 7.2 MMT. In response to questions about the low-ball estimate, the Office of the Chief Economist at USDA said, “We assume policy in place.”

No Policy Change, No Import Gain

Simply put, until the Chinese government says there’s been a change in policy or actual shipments indicate a change in policy, USDA will stick with the 7 MMT Chinese corn import estimate.

Piling on the confusion, USDA added 100 million bushels to estimated U.S. corn exports for 2020/21. That seems to reflect increased demand from China, but only up to the 7 MMT.

China-watchers say the country will import not just more, but significantly more. The question is: Does it matter?

When corn booked for export is added to the Sept. 11 estimate, corn exports are 2.4 billion bushels. With no change to supply or other demand, carryover would still be about 2.43 billion bushels with a stocks-to-use ratio of 16.5%. That’s similar to the 2019/20 marketing year when the national average on-farm cash corn price was $3.60.

So, adding existing sales to the tally really doesn’t matter to the price outlook.

A Comfortable Carryover

Some suggest China will import up to 27 MMT of corn in 2020/21. That makes a 20-MMT import estimate with 12 MMT of U.S. corn and 4 MMT of both Brazilian and Ukrainian corn seem conservative.

With Chinese corn imports at 20 MMT and no other balance sheet changes, corn carryover would be 2.31 billion bushels. Stocks-to-use would be 15.5%, which is very similar to the 2018/19 marketing year when the national average on-farm cash corn price was $3.61. Again, it really doesn’t matter to the price outlook; carryover is comfortable.

If guesses of 27 MMT of Chinese corn imports are right, and if the U.S. could get all the additional 7 MMT, U.S. corn exports would be a record 2.8 billion bushels. Make no changes to the rest of the balance sheet, and carryover would be 2.03 billion bushels for a stocks-to-use ratio of 13.4%.

That moves the needle, but not much past $4 for an on-farm cash price.

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