The USDA’s Foreign Agricultural Service in Beijing, China, Wednesday increased its estimate of China’s Marketing Year 2023/24 corn production by 4.2% from last year to 288.8 million tonnes because of greater planted area and higher yields.
The new information came in a Global Agricultural Information Network report from the FAS.
MORE ACRES
Yield estimates were up in some areas because of better, heavier rainfall in typically arid production regions, the GAIN report said. However, the FAS estimated an increase in corn feed and residual use (1 million tonnes more than the September Grain and Feed Update at 223 million tonnes) because of decreasing feed demand and low corn prices.
Corn starch and ethanol production regained profitability because of lower input prices, the FAS said. The FAS in Beijing forecasted corn imports at a conservative 20 million tonnes because of increasing prioritization of the PRC’s domestic grain security policy and farmer and domestic trader outcries to buy Chinese grain to protect farm incomes.
At the same time, the import of processed grain products like corn meal and barley flour may increase as processing in bonded zones rebounds, the FAS said. The FAS there forecasted China’s sorghum imports in 2023/24 will be up from last year but remain at a price disadvantage in comparison with barley and corn.
Wheat production in 2023/24 was adjusted downward by 0.8% or 1.1 million tonnes from last year because of losses from heavy rain that hit key growing areas just ahead of harvest, the GAIN report said. Wheat was not expected to be price competitive with corn in feed rations for the remainder of 2023/24.
The milled rice production estimate was adjusted to 144.6 million tonnes, down 0.9% or 1.3 million tonnes from last year because of lower planting area despite higher yields, the FAS said. Domestic rice prices increased slightly in response to local production losses and high international prices, but industry sources shared that the domestic market remained relatively insulated.
FEED, RESIDUAL USE ESTIMATE REDUCED
The FAS in Beijing forecasted that China’s 2023/24 demand for grains for feed and residual use will decrease slightly from 2022/23 as overall feed production reduces at pace with livestock reductions.
China Feed Industry Association data through November 2023 indicated total feed production began decreasing month-on-month and year-on-year starting in September 2023, the FAS said. The trend has continued for three months straight.
According to the Ministry of Agriculture and Rural Affairs’ official statistics, the total hog herd in September 2023 was 442.3 million head, still about 1% more than last September, the GAIN report said. However, the November sow inventory was 5% lower year-on-year after declining continuously month-on-month in the first eleven months of 2023.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $173.40 per cwt to $176.16, compared with last week’s range of $172.05 to $175.34 per cwt. FOB dressed steers, and heifers went for $270.35 per cwt to $274.89, compared with $270.93 to $277.08.
The USDA choice cutout Thursday was down $0.82 per cwt at $298.68 while select was up $0.61 at $287.85. The choice/select spread narrowed to $10.83 from $12.26 with 128 loads of fabricated product and 18 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.33 to $1.44 a bushel over the Mar corn contract, which settled at $4.51 3/4 a bushel, down $0.00 1/2.
The CME Feeder Cattle Index for the seven days ended Wednesday was $230.68 per cwt, up $0.47. This compares with Thursday’s Jan contract settlement of $232.02, up $0.20.