Bumper Chinese Maize Crop to Have “Bearish” Impact on Global Feed Grain Market
Early forecasts from the China National Grain & Oils Information Center (CNGOIC) estimate that China’s maize output will reach 232 million tons within the next year – an annual growth of 8%, far outpacing the projected 2.4% growth in domestic consumption.
“With inventories of over 150 million tons and lower demand from China, this is potentially ‘bearish’ for international feed grain prices,” Brenda Mullan, senior analyst with Home Grown Cereals Authority (HGCA) tells foodnavigator.com.
The combination of artificially high prices and China’s stockpiling policies have had the sought-after result of increased corn planting in the country – but they have also resulted in China’s domestic corn prices remaining approximately 30% above global prices. This in turn has created new opportunities on the Chinese market for the sale of alternative feed grain such as sorghum and barley.
Compounding the pressure that Chinese conditions are putting on global grain markets, U.S. growing conditions are reported to be ‘ideal’, although the growing season is still young and much can change over the course of the coming months. The latest planting intentions report issued by the U.S. Department of Agriculture (USDA) placed planted U.S. corn acreage for the 2015 harvest at 1.5% lower than last year as farmers shift to soybean cultivation. However, the report states that the pace of U.S. corn sowing is well ahead of 2014 and the previous five year average.
More detailed information and insight into the potential global availability of corn supplies will be forthcoming following the next USDA World Agricultural Supply and Demand Estimates Report.