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UPDATE 2-China cuts corn output forecast on bad weather; prices rally
June 9, 2017 / 4:59 AM / 2 months ago

UPDATE 2-China cuts corn output forecast on bad weather; prices rally

 (Updates to add comment, prices)
    BEIJING, June 9 (Reuters) - China on Friday slashed its
2017/18 corn output forecast to the lowest level in four years
after drought and hail hit planting in the northeastern region
of one of the world's top producers, spurring a rally in futures
prices.
    In its monthly crop report, the agriculture ministry said it
expects 2017/18 corn output of 211.65 million tonnes, down 0.7
percent from last month's forecast and 3.6 percent lower than
last year.
    The figure in June's Chinese Agricultural Supply and Demand
Estimates (CASDE) would make it the smallest crop since 2013,
according to the China National Grain and Oils Information
Center think tank.    
    Farmers in parts of China's northeast corn belt regions
switched to soybeans and substitute grains after drought made it
hard to plant corn, leading to a drop in corn acreage, the CASDE
report said.
    Corn output was also hit by hail in the country's northern
Hebei and central Henan provinces, where heavy rains and wind
damaged young crops, the report said. 
    The most-active Chinese corn futures rose 2.1
percent to 1,672 yuan per tonne, their highest in nearly two
months, as some speculators bet on higher prices due to extreme
weather.
    Concerns about U.S. crops may also have been a factor behind
the fresh buying, which broke the usually volatile market out of
a prolonged period of rangebound trade, said Meng Jinhui,
analyst at Shengda futures.
    Prices were on track for their best daily performance in
three months.
    Weather has also affected crops in the United States, where
spot corn futures hit a near one-year high last week on
forecasts for potentially stressful crop weather in the Midwest.

    China also reduced its 2017/18 sugar import forecast to 3.2
million tonnes from 3.5 million tonnes previously, according to
the CASDE report. 
    China's commerce ministry imposed hefty tariffs on sugar
imports in a ruling last month, closing the gap between Chinese
and global prices.
            2015/   2016/2017   2017/2018  2017/2018  Percentage
            2016   (estimated   (forecast  (forecast    change
                    by June)      ed by      ed by    
                                  May)       June)    
   Corn                                                    
  Planted   38.12     36.76       35.84      35.59      -0.70%
  acreage                                             
   (mln                                               
 hectares)                                            
  Output    224.6    219.57      213.18     211.65      -0.72%
   (mln       3                                       
  tonnes)                                             
  Imports   5.52      1.00        1.00       1.00       0.00%
   (mln                                               
  tonnes)                                             
  Soybean                                                  
  Planted   6.59      7.16        7.90       7.90       0.00%
  acreage                                             
   (mln                                               
 hectares)                                            
  Output    11.61     12.57       14.10      14.10      0.00%
   (mln                                               
  tonnes)                                             
  Imports   83.23     89.45       93.16      93.16      0.00%
   (mln                                               
  tonnes)                                             
  Cotton                                                   
  Planted   3.27      3.10        3.20       3.20       0.00%
  acreage                                             
   (mln                                               
 hectares)                                            
  Output    4.93      4.72        4.88       5.03       3.07%
   (mln                                               
  tonnes)                                             
  Imports   0.96      1.00        1.10       1.10       0.00%
   (mln                                               
  tonnes)                                             
   Sugar                                                   
  Planted   1.42      1.35        1.47       1.47       0.00%
  acreage                                             
   (mln                                               
 hectares)                                            
   Cane     1.30      1.18        1.28       1.28       0.00%
   Beet     0.13      0.17        0.20       0.20       0.00%
  Output    8.70      9.25        10.47      10.47      0.00%
   (mln                                               
  tonnes)                                             
   Cane     7.85      8.20        9.23       9.23       0.00%
   sugar                                              
   Beet     0.85      1.05        1.24       1.24       0.00%
   sugar                                              
  Imports   3.73      3.50        3.50       3.20       -8.57%
   (mln                                               
  tonnes)                                             
 

 (Reporting by Hallie Gu and Dominique Patton; Editing by
Richard Pullin)
  

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