The worst US drought in more than half a century has buoyed corn prices to a record high, making it harder for China to import and shipments are expected to decline.

The rising price of US corn makes it harder for China to use imports to meet the shortage, Shang Qiangmin, director general at the China National Grain & Oils Information Center, said on July 31. China will defer purchases and wait for prices to drop, Wayne Gordon, a strategist at UBS AG, said on July 27.

In April, the US Grains Council said that China may displace Japan as the largest corn importer as early as 2014. China's imports in 2015 may total 20 million tonnes, according to an October forecast from Singapore-based Olam International Ltd. 

"The US drought has made it very difficult" for China to import corn to boost supply, Zeng Liying, deputy director of the State Administration of Grain, said. "But we do have stockpiles, and corn planting has increased this year," she said.

Shipments in the year from October 1 may be less than the record 5 million tonnes estimated for this year by the USDA as purchases depend on prices, according to Shanghai JC Intelligence Co. Deliveries may decline to 3 million tonnes next year, the China National Grain & Oils Information Center said.

Lower corn shipments may contrast with greater resilience in the soybean trade, with Rabobank International predicting that arrivals of the oilseed into China, the world's biggest importer, may increase even after prices rallied to an all-time high.

Corn imports by Japan, the largest buyer, will stay near the lowest level since 1986 this year as record prices spur feed makers to seek cheaper alternatives, the Japan Feed Trade Association said last month. South Korea will consider stockpiling corn, soybeans and wheat overseas to cope with volatile prices, the country's Finance Ministry said today.

Corn on the Chicago Board of Trade had the biggest monthly rally since 1988 in July, surging 27% and peaking at US$8.205 a bushel on July 31. The December-delivery contract was at US$8.045 at 3:31 p.m. in Beijing. Soybeans, trading at US$16.27 a bushel, climbed to a record US$16.915 on July 23. Goldman Sachs Group Inc. has issued a three-month target of US$9 for corn and US$20 for soybeans.

On the Dalian Commodity Exchange, corn ended at RMB2,397 (US$376) a tonne yesterday, 4% less than a record in March. Importing US corn at current prices costs about RMB2,900 a tonne, compared with RMB2,500- 2,600 for domestic supplies, according to data from Shanghai JC.

While China was a net exporter of corn until 2010, usage has outstripped record output as surging incomes in the second- largest economy fuel consumption of animal protein, which uses grain as feed. In 2012-2013, there'll be a shortage of about 5 million tonnes on projected demand of 200 million tonnes and the biggest ever harvest of 195 million tons, according to the USDA.

The area in China planted to corn this year will gain 2.3% to a record 34.3 million hectares (84.8 million acres), according to the China grain centre. Above-average rains this year will help to boost yields, said Li of Shanghai JC.