China Corn Futures Hit Record High Amid Worries Over Crop Damage ...
By Hallie Gu and Shivani Singh
BEIJING, Oct 14 (Reuters) - China's corn futures hit a record high on Wednesday as investors bet on higher prices for the grain because of crop damage from typhoons this year and due to Beijing's efforts in years past to whittle down its once-mammoth state reserves.
The milestone came as China bought another 420,000 tonnes of U.S.
corn, adding to record purchases topping more than 12 million tonnes this year, according to the U.S. Department of Agriculture.
The most actively traded corn futures on Dalian Commodity Exchange for delivery in January hit 2,595 yuan ($385.14) per tonne, the highest on record.
China's corn output is expected to fall this year after typhoons flattened crops in parts of the country's northeastern corn belt, further stoking supply concerns after Beijing ran down its massive state stockpiles over the last several years.
The blistering rally in such a key feed sector staple - prices are up nearly 14% since early September despite the ongoing harvest - has raised expectations of additional crop imports.
Late-season weather damage to fully-formed plants in key production zones has also clouded outlook on the scale and quality of the emerging crops.
Corn acreage in some regions of Heilongjiang province also fell as farmers switched to soybeans, while output from Liaoning and Jilin provinces is expected to drop due to drought, said Meng Jinhui, senior analyst with Shengda Futures.
"The stockpile has been sold out. The market strongly expects supply shortages, and has gone bullish (on futures,)" Meng said.
Traders, dryers and end-users are scrambling to buy corn, said Yuan, tour du lịch quế lâm manager of a grain drying operation in Heilongjiang, tour du lịch quế lâm the country's top corn producer, where supplies from the just-harvested new crop have begun to enter the market.
"Many people believe prices will rise further," said Yuan, who was willing to be identified only by his surname due to the sensitivity of the matter.
Prices have also gained in other key corn hubs including Shandong, Hebei and kynghidongduong.vn Henan provinces, analysts and traders said.
Purchase prices for the new crop are at least 30% higher than in recent years, according to farmer Song Yongquan, who manages a cooperative that grows around 1,000 mu (67 hectares, or 166 acres) of corn in Henan.
That's after a temporary dip in prices in late September as the newly harvested supplies hit the market.
"The price already hit a low point when the new crop kicked in," said Song.
"Prices will go up further gradually."
($1 = 6.7400 yuan)
(Reporting by Hallie Gu and Shivani Singh in Beijing, additional reporting by Karl Plume in New Jersey; Editing by Tom Hogue, Nick Zieminski and Steve Orlofsky)