China MOA S&D Estimates (Sept 2016)

In its September "China Agricultural Supply and Demand Estimates" China's Ministry of Agriculture reduced its estimates of the country's corn production and imports for the coming year, but an excess supply of over 8 million metric tons is still expected for the 2016/17 market year. Soybean imports were revised downward to 84 mmt for 2016/17 as sales of government stocks displace some imports and tepid livestock industry growth slows soybean meal demand growth. Corn prices in production regions are expected to fall to 1500-to-1650 yuan/mt during 2016/17, down from 1850-1880 yuan during 2015/16.

China corn balance sheet (China Ministry of Ag, Sept 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	5,983	-27.00
Production	Mil MT	215.70	224.58	215.43	-1.08
Imports	Mil MT	5.52	4.60	2.00	-0.40
Consumption	Mil MT	183.39	193.35	208.97	0.80
--food	Mil MT	7.52	7.65	7.72
--feed	Mil MT	112.56	120.61	132.68
--industrial	Mil MT	52.57	53.97	56.35
--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	34.02	8.06

After big surpluses of 37.8 mmt in 2014/15 and 34 mmt in 2015/16, MOA projects a smaller surplus of 8 mmt for 2016/17. Production is expected to be down in 2016/17 on a 2-million-hectare reduction in area and hot, dry weather in parts of northeastern China that prompted a 27-kg downward revision of yield. Recovery of feed consumption (up 12 mmt) is the biggest change in the 2016/17 balance sheet. This apparently comes from a shift from imported corn substitutes back to corn (the soybean meal outlook presumes weak growth in feed demand). MOA expects only a 800,000-mt bump in industrial consumption from the VAT-rebate for starch and alcohol exports. Corn imports for 2016/17 were revised downward by 400,000 metric tons to 2 mmt as lower corn prices in China reduce imports of corn substitutes.

MOA reduced its 2015/16 soybean imports to 81.4 mmt as sales of domestic reserves slowed imports during the final month of the market year. The change in soybean inventory for 2015/16 is estimated at -1.84 mmt, reflecting the sale of government stocks.

China soybean balance sheet (China Ministry of Ag, Sept 2016)
Item	Unit	2014/15	2015/16	2016/17	Change from last month
Harvested area	1000 HA	6,800	6,590	7,150	-6
Yield	KG/HA	1,787	1,762	1,753	-44.00
Production	Mil MT	12.15	11.61	12.53	-0.33
Imports	Mil MT	78.35	81.42	83.50
Consumption	Mil MT	89.83	94.76	98.20
--crushing	Mil MT	77.34	81.00	84.00
--food	Mil MT	9.15	10.35	11.18
--seed	Mil MT	0.50	0.54	0.56
--loss & other	Mil MT	2.84	2.87	2.46
Exports	Mil MT	0.14	0.13	0.20
Inventory change	Mil MT	0.53	-1.84	-2.37	-0.35

The only changes in the 2016/17 soybean balance sheet is a downward revision in production due to dry weather in the northeast. Yield was revised downward, and MOA expects 6000 hectares to go unharvested. Soybean imports for 2016/17 are forecast at 83.5 mmt. MOA expects crush of soybeans to increase only 3 mmt duirng 2016/17. MOA expects a weak bounce in soybean production to 12.5 mmt in 2016/17.

China vegetable oils balance sheet (China Ministry of Agriculture, Sept 2016)
Item	Unit	2014/15	2015/16	2016/17	Change from last month
Production	Mil MT	26.12	25.06	25.32	0.04
--Soy oil	Mil MT	14.01	14.62	14.88	-0.04
--Rapeseed oil	Mil MT	6.92	5.66	5.37
--Peanut oil	Mil MT	3.03	3.01	3.16	0.08
Imports	Mil MT	6.14	5.55	5.35	0.08
--Palm oil	Mil MT	4.07	3.50	3.40
--Rapeseed oil	Mil MT	0.73	0.77	0.75
--Soy oil	Mil MT	0.77	0.65	0.58
Consumption	Mil MT	30.80	31.17	31.38	0.01
--Urban	Mil MT	20.17	20.41	20.55
--Rural	Mil MT	10.64	10.76	10.83
Exports	Mil MT	0.14	0.12	0.13
Inventory change	Mil MT	1.31	-0.67	-0.84	0.12

Cotton production is expected to fall again during 2016/17, mostly due to poor weather in Xinjiang: colder than normal temperatures in northern Xinjiang and heavy rain in the southern part of the region. Cotton inventories continue their slow decline to 9.3 mmt at the end of 2016/17, still 124% of forecast consumption. MOA expects 950,000 metric tons of cotton imports during 2016/17, slightly less than 2015/16 imports.

China cotton balance sheet (China Ministry of Agriculture, Sept 2016)
Item	Unit	2014/15	2015/16	2016/17	Change from last month
Beg. Inventory	Mil MT	12.40	12.80	11.17	-0.24
Area	1000 HA	4,219	3,433	3,100
Yield	KG/HA	1,460	1,510	1,524	-6.00
Production	Mil MT	6.16	4.93	4.72	-0.02
Imports	Mil MT	1.67	0.96	0.95
Consumption	Mil MT	7.40	7.50	7.50
Exports	Mil MT	0.02	0.03	0.03
End Inventory	Mil MT	12.80	11.17	9.31	-0.27

China sugar balance sheet (Min Ag, September 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

China commodity prices (RMB per metric ton) Sept 2016
Commodity	Description	2014/15	2015/16	2016/17
Corn	production areas	2266	1850-1880	1500-1650
	last month		1800-1880	1550-1650
	C&F imports	1643	1570-1620	1600-1700
	last month		1500-1670	1600-1750
Soybeans	production areas	4675	4275-4475	4350-4550
	C&F imports	3265	2925-3125	3050-3250
Cotton	Domestic 3128B	13894	12600	14000-16000
	last month		12500	12500-14500
Soy oil	Domestic ex-factory	5500-5900	5600-6300	5700-6400
	C&F imports	5400-5900	4300-5900	5600-6400
Palm oil	C&F imports	4300-5500	4300-5900	4350-5950
Rapeseed	ex-factory	6000-6500	6000-6500	6000-6500
Peanut oil	ex-factory	13400-14600	14000-16000	15000-16000
Sugar	Domestic	4877	5400-6200	5600-6400