The U.S. Grain Council (USGC) says due to higher yield and an increase in planted acreage, it projects a record 2012 corn crop in China, between 5 MMT and 6 MMT larger than last year's crop.
The council declined to provide an exact estimate on the 2012 crop or the actual size of the 2011 harvest. China's official estimate of 2012 corn production stands at 197 MMT, while USDA is expecting a crop of 200 MMT. USDA pegged last year's crop at 192.78 MMT.
"Persistent reports of weather and pest problems in some areas this summer, plus recent typhoon impacts in northeastern China, had raised concern about potentially significant yield reductions. The council's survey, however, suggests that the impact of these events is relatively small," says USGC. "While the final harvest will fall short of best-case expectations, it will be another record year for China corn."
USGC says a larger Chinese corn crop will help to limit demand destruction after a short U.S. corn. "Continued growth in China's economy and individual income growth will continue to drive increases in meat consumption and animal feed demand," said Bryan Lohmar, the USGC director in China. "But a good harvest this year, plus the forward purchases they have already done for the 2012-13 marketing year, gives China some breathing room in a very tight global market. China will likely be strategic in its purchases this year, entering the market to build reserves if and when prices dip."