China's corn production may rise this year more than many commentators have factored in thanks to "favourable" weather – but consumption may be greater too, thanks to the disappointing wheat harvest.
China's corn harvest will increase by 6m-10m tonnes provided weather remains benign, the US Grains Council said, following tours of crops in Henan, Shandong and Hebei provinces, which are responsible for some 30% of the domestic harvest.
"China's corn crop looks good," Bryan Lohmar, USGC director in China, said.
While failing to put a figure on the harvest, the increase implies a more comfortable beat of last year's crop, believed to have set a record, than other analysts have factored in.
China's official CNGOIC crop bureau has estimated the harvest rising 5.75m tonnes to 197.5m tonnes, while the US Department of Agriculture foresees the crop increasing by 2.2m tonnes to 195.0m tonnes, estimates matched by the International Grains Council.
China's crop estimates are often the subject of some dispute, and often considered inflated thanks to a subsidy system which rewards regions based on their production.
Orders cancelled
For investors, China's corn crop is a sensitive point thanks to its potential impact on spurring the country's rise from a country self-sufficient to one widely expected to become a structural importer.
The USDA forecasts China's corn imports at 5.0m tonnes in 2011-12, and next season, up from less than 1m tonnes in 2010-11, and sees them topping 18m tonnes in a decade's time, making the country the top buyer, ahead of Japan and Mexico.
However, doubts over China's import demand were stoked last week by data showing that it had cancelled 240,000 tonnes of orders of US corn for 2012-13 delivery...
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Source: Argentine Beef Packers S.A.
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