December 15, 2014

Over the past decade sorghum prices have averaged 6.4% lower than corn prices, however, for the first time in eight years sorghum prices may exceed corn prices in 2014/15 as China bids up prices amid high demand. In an unusual move, based on the latest crop data, the U.S. Department of Agriculture (USDA) is forecasting sorghum prices and corn prices to average the same this season between $3.20 per bushel and $3.80 per bushel. These forecasts are partially based on the fact that following a record harvest and strong beginning to the season, U.S. corn exports for November were only 2.4 million tons based on cargo inspections, while sorghum exports were at a seven year high of 5.8 million tons, with China taking record shipments of 5 million tons. U.S. exports of corn to China have fallen to just 57,300 tons for 2014 -15, compared to 1.96 million tons for the season before, after China banned imports of corn shipments containing Syngenta’s genetically modified corn strain, MIR 162, which has yet to be approved for import by Beijing. At the same time Ukraine has faltered on delivering all of the 1.1 million tons of corn it contracted to sell to China. China has been put in the position of turning to sorghum to replace the loss of corn imports. U.S. sorghum exports to China have grown four fold to 1.79 million tons since September 1^st, and an additional 2.24 million tons are on order bringing total commitments to 4.05 million tons compared to 1.05 million tons for the same period a year ago.

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