June 13, 2011

Corn is competing with fruits, vegetables and urbanisation for land in China this year, while corn storage facilities appeared to be under capacity, suggesting the country's corn stock levels remained relatively low, the US Grains Council (USGC) said.

"We had the opportunity to visit some private corn storage facilities, which we felt were well under capacity," the report released Friday (Jun 10)quoted Ken Kindler of Dow AgriSciences LLC, adding there was no certainty on measurements of state corn stock levels. "Farmers sold most of their 2010 production at harvest."

China emerged last year as a net corn importer, and analysts expect the import trend to rise given the speed and scale of China's demand for commodities.

Still, China's corn production this year may rise. Corn planting acreage for 2011 is expected to increase marginally, as farmers switched to corn after a price rally in 2010, the USGC team said.

But the council noted that "there is also increased competition for acres from fruits and vegetables, particularly near urban areas. Some land was unplanted and attributed to increased urban encroachment."

In the major producing provinces of Heilongjiang and Jilin, the council team noted that corn emergence was behind normal levels due to rainy weather and low temperatures, and that germination was "spotty" in some locations.