The U.S. stocks-to-use ratio for soybeans is even tighter than for corn, Glidewell says, “and some would suggest the stocks numbers are overstated. Most would say, though, that at some point we’ll wind up around 135 million bushels of carryover — which is not panic mode, but is tight.

“That means some areas of the U.S. will be really tight and will have to import soybeans from other parts of the country to run crushing plants, or some crushing plants might have to idled. The really tight stocks-to-use ratio that’s being projected is a direct result of the huge demand, and the bigger market share the U.S. saw this past year as a result of the South American shortfall.”

Chinese consumers’ demand for a diet more meat/protein-based has caused their demand for corn “to explode,” Glidewell says.

“But China has remained noticeably absent from the world’s corn markets as an importer. They did import some from the U.S. in 2012, then cancelled and sold back some of it, and made some money on it. I think everyone was expecting them to be a larger importer of corn than they ended up being. Their actual production ended up being a little closer to their usage pace. Who knows if they’ll enter the world corn market this summer? And if they do, it may not necessarily be U.S. corn that they import.”

Assuming no significant economic changes in the Chinese economy, their demand for corn and feed grains will continue to increase incrementally, Glidewell says, and “at some point they’ll have to enter the world market to import some percentage of their needs — that’s potentially a good thing for U.S. corn producers.”

China’s stocks-to-use ratio right now is based on official Chinese government data, he says, “which is relatively comfortable, still hovering around 26 percent. The farther above 20 percent you are, the more comfortable you are.

“The Chinese maintain large reserves of corn and all the basic commodities, and at present they’re seen as having an adequate supply of corn. There are still questions about this year’s crop and whether they’ll enter the world market.

“We think they will be a mild buyer, a not very significant buyer, through the summer. But they’re very savvy traders, and price will have a lot to do with when, and to what extent, they enter the world grain markets.”

China has adapted more modern farming production techniques, including hybrid varieties, Glidewell says.

“They’re buying expertise in agriculture — just as they are in other sectors. As a result, their yields continue to go up. There is room for more yield appreciation, and by and large — especially in the northern corn, soybean, and wheat-growing areas — they’re becoming more like U.S. producers insofar as size, scale, etc. Yields aren’t quite as high as the U.S., but they’re rapidly moving higher.”