China's top corn area to further delay planting on rains

 

 

Rains this week in China's top corn growing province of Jilin in the northeast could further delay planting of the grain until next week, local traders said on Wednesday (May 5).

 

Lower-than-normal temperature in spring has already delayed planting in most areas in the province. This is a time of year when farmers have normally completed planting.

 

The local weather bureau expects the province to have an average of 15-25 mm of rain from Tuesday to Thursday and temperatures to fall as well. However, the average temperature - at more than 10 degree Celsius - was high enough and the local weather authority urged farmers to start seeding as early as possible, according to reports.

 

The bad weather had supported the Dalian futures market, which traded slightly higher on Wednesday from Tuesday in anticipation that the delay could hurt output.

 

Jilin produced 18.1 million tonnes of corn last year, accounting for 11% of China's total output, official figures showed.

 

In a separate report, the National Development and Reform Commission, the country's top planning body, expected China's corn prices in the second quarter of the year to rise slightly driven by sound demand from corn processors.

 

Higher domestic corn prices have led some feed mills to import cheap grain from US, the largest exporter. But farmers are still keeping a large amount and rising temperatures will make it hard to store the produce longer and lead to a boost in sales to the market.

 

Meanwhile, corn prices in Harbin in Heilongjiang province were RMB1,760-1,780 (US$257.77-260.70) per tonne, higher than RMB1,740-1,760 (US$254.84-257.77) per tonne a week earlier. The prices were RMB1,730-1,740 (US$253.38-254.84) per tonne in Changchun in Jilin province, RMB30-40 (US$4.39-5.85) higher.

 

Reduced local supply and farmers' reluctance to sell continued to push up prices. The demand recovery in the feedmeal and industrial processing sectors also supported prices.

 

Analysts expect corn prices to rise further in the near term as the crop with farmers is dwindling; the supply in the northeast is expected to last only until the end of this month.

 

In addition, the government's sales volume is increasing to meet market demand, which has been boosted by the recovery in the hog sector.