This week, MOA released its second monthly "CASDE" (China Agricultural Supply and Demand Estimates) which includes balance sheets for corn, soybeans, cotton, vegetable oils, and sugar. The report excludes rice and wheat.
The August report increased the estimate of the 2016 Chinese corn crop to 216.5 million metric tons, up 2 mmt from the July estimate based on good weather that is expected to bump up the yield. Estimates of feed and industrial consumption of corn for 2016/17 were also increased, stimulated by falling prices in China. The estimates of corn prices for both 2015/16 and 2016/17 were revised downward from last month, as well. China's corn imports are expected to fall to 2.4 mmt in 2016/17. Corn prices are expected to be in the 1500-1650 yuan/mt range, down about 200 yuan from 2015/16.
China corn balance sheet (China Ministry of Ag, August 2016) | |||||
Item | Unit | 2014/15 | 2015/16 | 2016/17 | Change from last month |
Sown area | 1000 HA | 37,123 | 38,117 | 36,026 | |
Yield | KG/HA | 5,809 | 5,892 | 6,010 | 58 |
Production | Mil MT | 215.70 | 224.58 | 216.51 | 2.24 |
Imports | Mil MT | 5.52 | 4.60 | 2.40 | |
Consumption | Mil MT | 183.39 | 193.35 | 208.17 | 1.19 |
--food | Mil MT | 7.52 | 7.65 | 7.72 | |
--feed | Mil MT | 112.56 | 120.61 | 132.68 | 0.69 |
--industrial | Mil MT | 52.57 | 53.97 | 56.35 | 0.50 |
--seed | Mil MT | 1.69 | 1.66 | 1.61 | |
--waste and other | Mil MT | 9.05 | 9.56 | 9.81 | |
Exports | Mil MT | 0.01 | 0.03 | 0.20 | |
Inventory change | Mil MT | 37.82 | 36.00 | 10.38 | 0.89 |
While China's corn output will be less than last year, MOA expects China's corn inventory to increase again during 2016/17. The expected surplus of 10.38 mmt will be less than the 37.82 mmt surplus in 2014/15 and the 36 mmt surplus estimated for 2015/16. The estimate of the surplus for 2015/16 was revised downward this month due to progress in auctioning corn reserves. MOA expects a reduction in DDGS imports due to anti-dumping duties, which will "increase the value" of domestic DDGS and increase corn used for alcohol processing. MOA thinks domestic corn prices will fall below the C&F price of imported corn during 2016/17.
China corn prices (RMB per metric ton) | |||
Description | 2014/15 | 2015/16 | 2016/17 |
production areas | 2266 | 1800-1880 | 1500-1650 |
last month | 1830-1930 | 1550-1750 | |
C&F imports | 1643 | 1500-1670 | 1600-1750 |
last month | 1500-1670 | 1650-1850 |
MOA reduced its estimate of 2016/17 soybean imports by 1.5 mmt to 83.5 mmt. They also cut their estimates of soybean crush consumption. The government's injection of soybean reserves into the market will replace some imports. China's soybean production shrank to just 11.6 mmt for 2015/16 and will be up to 12.86 mmt for 2016/17, according to MOA.
China soybean balance sheet (China Ministry of Ag, July 2016) | |||||
Item | Unit | 2014/15 | 2015/16 | 2016/17 | Change from last month |
Area | 1000 HA | 6,800 | 6,590 | 7,156 | |
Yield | KG/HA | 1,787 | 1,762 | 1,797 | 14.00 |
Production | Mil MT | 12.15 | 11.61 | 12.86 | 0.10 |
Imports | Mil MT | 78.35 | 82.49 | 83.50 | -1.50 |
Consumption | Mil MT | 89.83 | 95.11 | 98.20 | -1.22 |
--crushing | Mil MT | 77.34 | 81.98 | 84.00 | -1.20 |
--food | Mil MT | 9.15 | 9.71 | 11.18 | |
--seed | Mil MT | 0.50 | 0.54 | 0.56 | |
--loss & other | Mil MT | 2.84 | 2.88 | 2.46 | -0.02 |
Exports | Mil MT | 0.14 | 0.13 | 0.18 | |
Inventory change | Mil MT | 0.53 | -1.14 | -2.02 | -0.18 |
Soybean oil production for 2015/16 was adjusted downward due to a lower estimate of soybean imports, and the 2016/17 production estimate was reduced. MOA expects rapeseed imports to fall during 2016/17 as inspection and quarantine requirements are tightened.
China vegetable oils balance sheet (Min Ag, July 2016) | |||||
Item | Unit | 2014/15 | 2015/16 | 2016/17 | Change from last month |
Production | Mil MT | 26.12 | 25.28 | 25.28 | -0.10 |
--Soy oil | Mil MT | 14.01 | 14.62 | 14.92 | -0.23 |
--Rapeseed oil | Mil MT | 6.92 | 5.66 | 5.37 | 0.12 |
--Peanut oil | Mil MT | 3.03 | 3.01 | 3.08 | |
Imports | Mil MT | 6.14 | 5.62 | 5.27 | |
--Palm oil | Mil MT | 4.07 | 3.60 | 3.40 | |
--Rapeseed oil | Mil MT | 0.73 | 0.82 | 0.75 | |
--Soy oil | Mil MT | 0.77 | 0.65 | 0.58 | |
Consumption | Mil MT | 30.80 | 31.17 | 31.37 | -0.01 |
--Urban | Mil MT | 20.17 | 20.41 | 20.55 | |
--Rural | Mil MT | 10.64 | 10.76 | 10.83 | 0.01 |
Exports | Mil MT | 0.14 | 0.12 | 0.13 | 0.02 |
Inventory change | Mil MT | 1.31 | -0.13 | -0.96 | -0.12 |
Cotton production has been adjusted upward slightly based on good rain and temperature in Xinjiang. Imports will be just 920,000 mt during 2015/16 and 950,000 in 2016/17, according to the MOA report, as China tries to unload its inventory of cotton. Cotton reserves will decline to 9.58 mmt at the end of 2016/17, down from their peak of 12.8 mmt at the end of 2014/15.
China cotton balance sheet (China Ministry of Agriculture, July 2016) | |||||
Item | Unit | 2014/15 | 2015/16 | 2016/17 | Change from last month |
Beg. Inventory | Mil MT | 12.40 | 12.80 | 11.41 | -0.25 |
Area | 1000 HA | 4,219 | 3,433 | 3,100 | 33.00 |
Yield | KG/HA | 1,460 | 1,514 | 1,530 | 20.00 |
Production | Mil MT | 6.16 | 5.20 | 4.74 | 0.11 |
Imports | Mil MT | 1.67 | 0.92 | 0.95 | 0.02 |
Consumption | Mil MT | 7.40 | 7.24 | 7.50 | 0.38 |
Exports | Mil MT | 0.02 | 0.02 | 0.03 | 0.01 |
End Inventory | Mil MT | 12.80 | 11.66 | 9.58 | -0.51 |
MOA adjusted sugar consumption downward by 100,000 mt due to rising sugar prices and falling prices of corn-based sweetener substitutes.
China sugar balance sheet (Min Ag, July 2016) | ||||
Item | Unit | 2014/15 | 2015/16 | 2016/17 |
Area | 1000 ha | 1579 | 1435 | 1433 |
--sugar cane | 1000 ha | 1457 | 1301 | 1270 |
--sugar beets | 1000 ha | 122 | 134 | 163 |
Yield | MT/ha | 54.6 | 54.38 | 54.38 |
--sugar cane | MT/ha | 61.8 | 60.75 | 60.00 |
--sugar beets | MT/ha | 47.4 | 48.00 | 48.75 |
Sugar production | Mil. MT | 10.56 | 8.70 | 9.90 |
--sugar cane | Mil. MT | 9.82 | 7.85 | 8.85 |
--sugar beets | Mil. MT | 0.74 | 0.85 | 1.05 |
Sugar imports | Mil. MT | 4.81 | 3.50 | 3.50 |
Sugar consumption | Mil. MT | 15.1 | 15.20 | 15.30 |
Sugar exports | Mil. MT | 0.06 | 0.16 | 0.07 |
Inventory change | Mil. MT | 0.21 | -3.16 | -1.97 |
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