The USDA’s Foreign Agriculture Service in Beijing, China, Thursday reported that in marketing year 2024/25, the country’s estimated total grain output will reach a record 706.5 million tonnes, a 1.6% increase over MY-2023/24, driven by expanded acreage and higher yields.
CORN PRODUCTION FORECAST UP 2%
Corn production was forecast to rise 2% to 294.9 million tonnes, supported by increased planting of high-yield varieties, although challenges like toxin contamination in new crop corn persist, the FAS report said.
Wheat production grew to 140.1 million tonnes, a 2.6% increase attributed to improved yields and quality, despite concerns about weather effects on future crops, the FAS said.
Milled rice production increased slightly to 145.3 million tonnes, with stable prices and procurement activities reported across key provinces.
FEED, RESIDUAL USE SEEN GROWING
Feed and residual use of grains was forecast to grow modestly to 287.2 million tonnes, reflecting increased corn use in feed formulations because of lower prices, the FAS report said. This shift is reducing reliance on wheat and rice as feed ingredients. Industrial demand for corn also is on the rise, with processing plants operating at higher utilization of their capacity despite export constraints stemming from EU preliminary anti-dumping measures on certain amino acids.
Trade dynamics reveal a strategic reduction in corn imports to 14 million tonnes as part of China’s government policies to protect domestic farmers coupled with efforts to diversify corn suppliers, which is resulting in more corn coming from South American origins.
Sorghum and barley imports remain relatively stable, but industry sources expect them to decline slightly amid government curbs, while high stocks at major ports highlight subdued demand, the FAS said.
Wheat imports were projected to decrease by 37% to 8 million tonnes because of strong domestic production and weak demand, although trade with Argentina is expanding, the FAS said.
Meanwhile, rice imports were forecast to increase following India’s relaxation of export restrictions, the FAS said.
Record-low corn prices in late 2024 encouraged corn use in domestic feed and industrial sectors, while wheat prices have fallen below government support levels in some regions, prompting state interventions to stabilize markets.
EXPECT MORE FEED DEMAND
Expected increases in livestock and poultry production will increase feed demand, the FAS said
Swine inventories recovered by 2.8% quarter-on-quarter by late 2024, though they remain down year-on-year, the FAS said. Pork production was expected to increase in 2025, alongside a 2% rise in broiler production.
Overall, the PRC continues to focus on boosting domestic grain production, reducing dependence on imports and navigating market challenges, like quality concerns and shifting trade patterns that pose challenges to future growth.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $201.58 per cwt to $203.99, compared with last week’s range of $199.88 to $208.09 per cwt. FOB dressed steers, and heifers went for $315.83 per cwt to $321.61, compared with $312.04 to $319.72.
The USDA choice cutout Thursday was down $1.06 per cwt at $330.96 while select was off $0.78 at $317.21. The choice/select spread narrowed to $13.75 from $14.03 with 129 loads of fabricated product and 34 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $359.16 per cwt, and 50% beef was $112.21.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.20 to $1.35 a bushel over the Mar corn contract, which settled at $4.89 3/4, up $0.05 1/2.
The CME Feeder Cattle Index for the seven days ended Wednesday was $277.55 per cwt, down $0.63. This compares with Thursday’s Jan contract settlement of $277.07, up $0.02.