September 8, 2010

China's corn area expects cold weather

The temperature in China's top corn area is set to fall sharply this week, delaying the crop, while state auctions posted their lowest sales of corn.

The temperature in Jilin, in the northeast, may fall as much as nine degrees celsius (48.20F), and the sharp loss of heat could delay grain fill, said China's weather bureau. But the weather could warm up on Thursday (Sep 9).

Early frost was also forecast to hit the northern mountain areas of Heilongjiang province this week, another major soy and corn area, but traders expected no damage to crops.

"If the weather stays low for a long period, we may revise down the output forecast," said one analyst with a corn consulting firm.

Weather this month is key for a bumper harvest in China, the world's No.2 consumer, and will influence whether it continues to import corn after posting its highest import volumes in 15 years so far this year.

On Tuesday, the government sold only 18.8% of corn out of nearly one million tonnes offered in the northeast.

Many feed mills and processors are holding ample stocks before the domestic harvest next month.

Beijing also restricted bidders to some qualified big feed mills. The government has been trying to cool prices by releasing state reserves every week.