July 10, 2012

Global corn's 2012-13 prices likely to fall on improved China crop outlook

As the production of China's commodity is likely to improve on increased rains in northeast provinces, global corn prices may drop marginally in 2012-13.

The corn production of the country was at risk of prevailing dry weather conditions, but above normal rainfall saved the crop from destruction.

The good production prospect is likely to weigh over global prices but the booming poultry industry is likely to keep the prices upwards. The rains also, likely to boost the production of soy crops too.

China's corn area forecast for 2012-13 has been raised by 300,000 hectares to 34.3 million and the total production is estimated to be at a record 195 million tonnes.

China is one of the largest producers of corn and is the top consumer of the commodity. Corn is mostly used to feed for poultry industry.

In Chicago Board of Trade (CBOT), corn for July delivery traded up US$0.18 2/8 to US$7.61 4/8 per bushel.