June 8, 2010

 

China corn crop improves on good weather conditions

 

 

Corn crops in the top-producing regions of China, the world's second-largest consumer, are in better condition than last month as warm, sunny weather reduced stress caused by rain and cold temperatures, a survey showed.

 

Eleven of 15 farmers in three northeastern provinces last week said seedlings also appeared healthier than at the same time in the past two years due to good soil moisture and sunlight. The remaining four said the young plants were in average or worse condition.

 

A bigger crop may slow a surge in domestic prices and reduce the need for increased imports. Delayed planting of the main crop helped send local prices to records, prompting companies including state-owned Cofco Ltd. to make the biggest purchase of US corn in 14 years, and spurring stockpile sales.

 

Ten of the 15 farmers reported declines of more than 20% in their output last year from 2008 because of drought, the survey showed. Only two farmers said they still had unsold grain, which they are keeping to feed to pigs. Few of their neighbours are known to have unsold corn, they said.

 

China's corn harvest in 2009 declined by a more-than-estimated 13% to a four-year low because of droughts in the main growing regions, analysts said earlier. Output dropped to 144.374 million tonnes from 165.9 million tonnes in 2008, it said. The estimate was below the 155 million tonnes the USDA predicted October 9 and the 163 million forecast October 14 by the China National Grain and Oils Information Center.

 

China will probably produce 166 million tonnes of corn in the 2010-11 year, according to the USDA.

 

Importers led by Cofco had ordered a total of 595,100 tonnes of US corn as of May 20, US government data showed. More purchases may be made as US prices have dropped, making imports more profitable, traders and analysts said.

 

Analysts said that a supply shortage remains even as the crop improves, noting that the government will include its regular stockpiles in its weekly auction on June 11, something "rarely" done, indicating supply won't be ample, even with a better turnout.

 

Area planted to corn probably declined slightly from last year, especially in Heilongjiang and parts of Jilin, because like Zhang, some farmers gave up corn for soy, rice or other smaller crops, analysts said.

 

Crop development also improved because of seeding and planting methods, the survey showed.

 

None of the farmers interviewed used early-maturity seeds as promoted by the government and instead used the normal 125 to 128-day varieties. Early-maturity seeds would yield between 10-15% less, they said. The longer growing season means the crops may continue developing a few days past October 1, when the risk of frost is higher, they said.