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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
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