China could become huge corn market for U.S.

Opportunity exists for China to import a “huge” amount of U.S. corn to meet its current market demand, before the 2010 crop enters the market, according to U.S. Grains Council Assistant Director in China Sam Niu Yishan.

This observation came subsequent to the Council’s spring tour of Northeast China’s corn crop production and supply, which concluded June 3, 2010.

(For background see

Separated into three groups, nine experts in the international grains trading field, including members of USDA’s Foreign Agricultural Service, traveled more than 3000 kilometers (1,864 miles) throughout the Chinese Provinces of Heilongjiang and Jilin. The team also met with officials from Heilongjiang Grains Bureau and Jilin Agricultural Committee to exchange opinions on China’s crop production as well as its 2010 planting adversities.

“China’s 2010 corn planting acreage is lower than expected, due to abnormal rains, snow and temperatures this spring,” said Yishan. While planting corn is more desirable due to current corn market conditions, Yishan said 2 to 3 percent of intended corn planting did not occur. Instead, farmers planted other crops such as green beans, sunflowers and corn silage.

Despite the 15-18 day planting delay in Heilongjiang, corn germination was ideal and the weather conditions were the best they’ve been in recent years. However, according to Yishan, the corn looked “not as strong as normal,” which could impact yield.

China’s corn stock supplies were reconfirmed with more than a 15 percent reduction, while current supplies show significant signs of degradation.

“The current corn quality is of concern with about a 20 to 30 percent mold problem in some corn storage facilities. This was caused by increased rains and snows, but also because farmers put ears on the ground with wet and high temperatures for an extended period of time,” said Yishan, also noting the moisture was as high as 38 percent during harvest. “This moisture situation will surely affect the market supply in the upcoming months, before the new crops come into the market.”

The market depends on the government’s sales of reserves either by auction or import, especially considering meeting the demand in southern China from August to October. Yishan said there were very few temporary reserves left for auction by the government, leaving it with only two options: To sell the national reserves, which are not as large as expected, or import.

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