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China’s corn supply and demand and inventory composition at the end of August

China Agriculture Report By CnAgri2018-10-25 10:25:14China Agriculture Report Print
Keywords:Grains Oilseeds
Analysis of corn supply and demand in 2017/18: national sown area of corn reached 34.60 million hectares in 2017, the lowest level in the last six years; per unit area yield was 5958kg/hectare; and total production came to 206 million tons, the lowest level since 2011. The annual imports totaled 3.724 million tons. Comprehensively considering beginning inventory, production, and imports, the total supply amounted to 300 million tons.
In 2017/18, corn consumption dropped to 245 million tons; of which, feed consumption reached 158 million tons, hitting a new high, and industrial consumption was 67.452 million tons. Ending inventory decreased to 54.893 million tons, and safety factory declined to 22.42%. The annual price of corn in the crop year was 1788yuan/ton.
As for monthly supply and consumption, in August, the harvest yield of spring corn in the South was 18.796 million tons; the imports were 330,000 tons. Taking last month balance into account, the monthly supply of corn totaled 73.10 million tons. In consumption, feed consumption and industrial consumption were 13.66 million tons and 4.964 million tons. Considering food consumption, loss, and seed consumption, the monthly consumption of corn came to 20.2 million tons, and month-end inventory was 52.90 million tons.
From the perspective of month-end inventory composition, national inventory of corn reached 15.921 million tons at the end of August. For the harvest of corn, farmers’ inventory increased to 9.676 million tons. Corn auctions brought dealer inventory to a higher level, feed and deep processing enterprises’ inventory also increased to a relatively high level, and farmers’ sales rate of corn reached 50.37%. At the end of the last crop year, all grain of farmers were sold. 
Analysis of corn supply and demand in 2018/19: domestic sown area of corn increases, and per unit area yield is expected to decrease under the impact of high temperature and drought in the Northeast. It’s estimated that the annual production of corn in 2018/19 will reach 207 million tons, and imports may increase to over 5.6 million tons. The consumption of corn for feed will further decline, and industrial consumption may see a short-term growth as new factories go into operation and corn price will continue to grow. In 2018/19, domestic consumption of corn will come to 231 million tons, ending inventory will drop to 37.13 million tons, and safety factor will decrease to 16.11%, the lowest level since 2004.
Lower ending inventory and safety factor will inevitably push up annual price of corn and support later production. The average annual price will rise to over 2234yuan/ton, and the highest price in this year may hit a all-time level. 
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