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How Will China Meet their Grain Demand? - 30 October 2013

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Tuesday 29th October 2013.
Sarah Mikesell - TheCropSite Senior Editor

Sarah Mikesell
Senior Editor



Greetings! The color all around me is trumpeting that fall has arrived. I spoke to Mitch Heisler, Wyffels Hybrids agronomist, again this week and he said Illinois and Iowa farmers are about half done with corn harvest and about three-quarters finished with soybean harvest.

USDA’s Crop Progress report told a different story for the top 18 corn and soybean producing states, indicating a leap forward in corn harvested figures this week. Harvested corn acres came in at 59 percent versus 39 percent last week.

Soybean harvest stands at 77 percent which is slightly under trade expectations of over 80 percent harvested. However, this week’s data shows significant gains compared to last week at 63 percent harvested.

This week, harvest will slow as storms sweep across the Midwest. Weather is expected Tuesday up through the Texas/Gulf Coast states and then should hit the central Midwest Wednesday and continue its trek east Thursday. US forecasters say to expect severe weather with this storm, so be safe!

My UK colleague attended the AHDB Grain Outlook conference last week in London and China’s growing demand for meat and feed was a hot topic. China’s meat consumption is expected to rise by 35 per cent by 2020, while rice and flour consumption will fall by five per cent each.

Consumption of cooking oil is also expected to rise by 35 percent while sugar consumption will go up by 52 percent and consumption of dairy products will rise by 116 percent, according to Sylvia Ren, China Markets Manager at FCStone. At present 55 per cent of the Chinese population live in towns.

When it comes to pork, China is the BIG leader – producing more pigs than the next 43 nations. The growth in the pig population to satisfy the demand for meat also means that a rise in meal consumption in feed of just 10 pounds per head will require an additional 3.25 million tonnes of meal. However, China has the highest corn and wheat prices in the world, which means the country relies heavily on imports.

Over the last five years, the Chinese government has taken active measures to increase stocks of oilseeds to help stabilize the market. China is also starting to grow reserve stocks of corn, rice and wheat.

For the Chinese farmer, corn has the highest planting margin. Last year the country increased corn planting by two per cent, with some of the top areas increasing acreage by seven per cent. By contrast soybean planting was down by 20 per cent.

To read much more about expectations for China’s growth, click here.

Have a great week!

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