China's corn production is expected to increase to 155-160 million tonnes this year, up 3-8 million tonnes from the previous year, but prices may keep tumbling due to weak demand.

September is the key month to corn production, and major corn production regions in China had better weather conditions this year during growing periods. The delayed bad weather in northeast China, and less rain in north China are also expected to help improve corn output.

As corn output is basically fixed, price changes are determined by demand. However, corn demand from the livestock industry has contracted this year due to lower profitability and even negative returns in raising live hogs and poultry.

With a weaker than expected domestic demand, and a projected static export volume growth, the corn production increase is seen to pressurise prices.

September saw corn price drop by RMB 10-30 per tonne at Shenzhen port. Corn prices are forecast to keep falling after the marketing of new grain.