June 19, 2012

China's corn sowing area seen to expand 20%

This year, Northeast China's corn sowing land is estimated to soar by almost 20% pushed up by higher profit in growing corn than soy, the China Securities Journal reported Friday (June 15).

The new corn crops are anticipated to come onto the market in September.

Since the end of last year, domestic corn prices have been rising persistently. By the middle of March, the September corn contract traded on the Dalian Commodity Exchange had surged to RMB2,494/tonne (US$392.2) from RMB2,271/tonne (US$357.13) at the beginning of this year.

With the anticipated sharp rise of corn acreage, corn supply is likely to be eased in the second half of this year.

Han Shuyun, a researcher with Industrial Futures, said that significant expansion of planting area and lower import cost might weigh on corn prices over the coming months.

In the middle of March, the corn contract for delivery in January 2013 was less than RMB2,400/tonne (US$377), RMB100/tonne (US$15.73) lower than the May contract, which indicated the market's lacklustre outlook for corn prices.