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USDA: Mexico buys most U.S. sorghum since 2012

CHICAGO - Mexico purchased its largest volumes of U.S. sorghum in nearly 3-1/2 years last week, U.S. Department of Agriculture data showed on Thursday in a sign that low prices enticed the former top importer of the grain to resume buying.

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Sorghum. Agweek file photo.

CHICAGO - Mexico purchased its largest volumes of U.S. sorghum in nearly 3-1/2 years last week, U.S. Department of Agriculture data showed on Thursday in a sign that low prices enticed the former top importer of the grain to resume buying.

Mexico was the top export market for U.S. sorghum for more than a decade, before China started importing record volumes of the non-genetically modified grain used primarily as animal feed.

China's aggressive purchasing in the last year pushed up prices, resulting in sorghum trading at a rare premium to corn , and forced Mexico to the sidelines.

However, U.S. farmers in states such as Kansas and Texas also responded by boosting sorghum acreage. Expectations for the largest harvest since 1999 are now weighing on prices for sorghum, which is also known as milo.

Sorghum, which does not have a futures contract, was fetching $3.79 per bushel at an elevator in southwestern Kansas, the same price as corn and down from about $5 last summer.

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Mexico's own sorghum crop was hit by an aphid infestation, resulting in a total crop loss for some growers in the Guanajuato state, according to a USDA attache.

But the country's ramp-up in buying of U.S. supplies probably was price-driven, according to INTL FCStone Inc trader Mike O'Dea.

"Historically, Mexico would bring in milo because it would trade at a discount to corn," O'Dea said.

Mexico bought 88,000 tonnes of U.S. sorghum in the week ended on Oct. 22, the first sizable volumes since September 2013 and the largest one-week purchase since the country bought 108,000 tonnes in the week ended on May 31, 2012, USDA data showed.

China, which also uses sorghum to make the alcoholic beverage baijiu, has continued to buy from the United States. Last week, it purchased bought 111,000 tonnes, bringing the total for the month to roughly 385,000 tonnes.

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