Dim Sums: Agricultural Markets in China

A recent spurt in Chinese corn prices works against China's "supply side structural adjustment" which aims to shift production from corn to other crops to reduce excess supplies of corn. Profitability of corn could undermine these plans by inducing China's farmers to plant another huge corn crop this spring while the world is already awash in excess corn supplies. The January 2018 China Agricultural Supply and Demand Estimates (CASDE) explained that farmers in the northeastern provinces have been holding back corn in anticipation of rising prices. The influx of cash from corn producer subsidies recently distributed allowed them to pay back loans without having to sell corn to generate cash; this allowed them to hold on to their corn longer. However, CASDE says the national average wholesale corn price is expected to remain stable at 1600-1700 yuan/mt, "constrained by high inventories." An MOA news conference on the 2018 outlook for agricultural markets...

China Ministry of Agriculture's monthly S&D report sees supply pressure from domestic corn reserve sales and surging soybean imports putting downward pressure on markets. Cotton supplies are "tight" as government reserves shrink below a year's supply. The China Agricultural Supply and Demand Estimates (CASDE) for November 2017 was released Nov. 9, with few changes from the previous month. The 2016/17 corn market year is now complete, and CASDE estimates that demand exceeded supply by 11.2 million metric tons (mmt). The only change in the corn balance sheet from last month was a slight increase in imports to 2.46 mmt. In fact, over the course of the year CASDE made few changes in its corn S&D for 2016/17. A year ago, in its November 2016 report, CASDE estimated that corn supply would exceed demand by 3.8 mmt during 2016/17. The main change since that report is the raising of its initial low-ball estimate of production (213.6 mmt) to the official output sta...

There were few changes in supply and demand estimates by China's Ministry of Agriculture in August with harvests for major crops about to begin in coming months. The 2016/17 estimate of corn imports was raised by 200,000 mt to 1 million metric tons. According to MOA, the corn auctioned from reserves has not met demands of processors, so some switched to imports. As of yesterday's auctions, 40 mmt of corn had been auctioned from China's reserves since May. However, the MOA balance sheet estimates that the supply of corn for 2016/17 will still exceed consumption by 9.7 mmt. MOA revised its estimate of 2017/18 corn  yields downward due to pest problems in certain areas--although the yield is still historically high. Corn production for 2017/18 will fall to 210.7 mmt, and consumption will exceed supply by 3.17 mmt in the coming market year, according to the MOA estimates. China corn supply and demand (Ministry of Ag, August 2017) Item Unit 2016/17 ...

The July 2017 China Agricultural Supply and Demand Estimates (CASDE) from China's Ministry of Agriculture boosted its estimate of soybean imports and slashed its estimates of corn imports for 2016/17.   China soybean supply and demand (Ministry of Ag, July 2017) Item Unit 2016/17 June 2016/17 July 2017/18 June 2017/18 July Planted area 1000 ha 7,156 7,208 7,899 8,196 Harvested area 1000 ha 7,150 7,202 7,899 8,196 Yield Kg/ha 1758 1796 1785 1797 Production MMT 12.57 12.94 14.1 14.73 Imports MMT 89.45 91.55 93.16 93.16 Consumption MMT 103.69 106.16 108.59 108.63 --Crushing MMT 89.01 91.09 92.50 92.50 --Food MMT 11.18 11.18 12.04 12.04 --Seed MMT 0.6 0.64 0.6 0.64 Loss and other MMT 2.9 3.25 3.45 3.45 Exports MMT 0.14 0.13 0....

China's Ministry of Agriculture cut its estimate of 2017/18 corn output by 1.5 million metric tons in its June "China Agricultural Supply and Demand Estimates" (CASDE) report , based on drought conditions in parts of northeastern China. The yield was cut slightly due to hail that damaged new corn plants in some areas. The new estimate of 2017/18 corn output is about 8 mmt less than 2016/17, and nearly 13 mmt less than 2015/16. MOA now estimates that demand for corn will exceed supply by 1.7 mmt in 2017/18. China corn supply and demand (Ministry of Ag, June 2017) Item Unit 2015/16 2016/17 June 2017/18 May 2017/18 June Planted area 1000 ha 38,119 36,760 35,840 35,590 Harvested area 1000 ha 38,119 36,760 35,840 35,590 Yield Kg/ha 5,893 5,973 5,948 5,947 Production MMT 224.63 219.57 213.18 211.65 Imports MMT 5.52 1 1 1 Consumption ...