China Corn Production Projected Higher

Grains council pegs crop below official Chinese government estimate.

According to a recent U.S. Grains Council corn crop tour in major corn producing provinces, Cary Sifferath, USGC senior director in China, projects total China corn hectares is flat to down but production is higher thanks to better weather and more rainfall this growing season.

Sifferath projected corn production in China at 153.54 million metric tons, lower than the official Chinese estimate of 156 mmt and higher than Chinese-American joint venture analyst firm JCI's 142.4 mmt estimate.

He said overall yields look to be much higher this year compared to last year with a national average of 5.28 metric tons/hectare or approximately 84 bu/acre. Sifferath estimate yields in Jilin, the largest producing province, to average 6.98 metric tons/hectare or 111 bu/acre.

China was once a significant corn exporter to the Asian market, whereas today its booming livestock industry and growing middle class have brought exports to an end. The government has officially shut down exports of corn, as well as wheat and rice, as a way to control inflation and keep grain stocks in-house. China is not expected to come back into the corn export market for at least the next six months, and it could be even longer.

China's government is very tight lipped about ending stocks, but JCI estimates stocks are expected to be down to 32 mmt, down from 43 mmt last year, said Sam Niu, USGC assistant director in China.

Sifferath doesn't expect China to be a corn importer this year, especially with their large winter wheat crop allowing for additional feeding of wheat.

Five ethanol plants run on grain, but the government isn't licensing any new grain ethanol plants to prevent a fight between corn for feed vs. fuel. The government also caps the amount of corn that can be used for corn processing.

Feed demand remains the largest driver for Chinese corn use. Disease issues in 2006 and 2007 hindered feed demand, but Sifferath said he sees higher corn feed demand this year since the disease issues are over.

Source: Feedstuffs

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