China's Ministry of Agriculture published its estimate for the 2018/19 corn crop last Thursday. At 210 million tonnes, production is expected to decline by 2.9%; The acreage will be restricted, they say. By contrast, Chinese soybean harvest will increase by 4.9% to 15.27 million tonnes.
On the same day, the USDA also gave its estimate for these two crops in China. There are big differences between the two estimates.
The USDA estimate comes to a record harvest of 225 million tons, among other things because the acreage is expanded by 3%. The soybean harvest in China, on the other hand, will decline slightly in 2018/19, reaching 14.1 million tonnes.
If the Chinese crop estimates prove correct, that would be bullish for the world market and for the world's final stock.
China's huge corn stocks would disappear, if only because the government in Beijing wants to enrich gasoline throughout the empire with 10% ethanol by the year 2020. Maybe China will soon have to buy more corn on the world market.
The small increase in soybean production would hardly affect China's import requirement.The yield per hectare in China is already only two tons per hectare, whereas in the USA up to four tons and Brazil up to 3.6 tons per hectare are harvested. China annually imports 64% of all soybeans on the world market, mainly from the US and Brazil.
Text: HANSA Derivatives Trading GmbH /
