China’s agricultural outlook committee has maintained its forecast across key metrics for corn, soybeans and edible oil in the latest monthly update of its China Agriculture Supply and Demand Estimates (Casde).
On corn, local sales are expected to remain firm in the wake of improved logistics and transportation as China looks to further optimize its Covid control measures.
In addition, supply levels in the short term will be elevated as farmers look to boost grain sales ahead of the Lunar New Year holiday period, which takes place at the end of January 2023, which could lead to some easing of prices.
However, with the continued demand from the animal feed sector, improved consumption from industrial sectors and more buyers willing to replenish stocks, prices are expected to remain supported and stabilize at a high level, the report noted.
Soybeans outlook
For soybeans, while the estimates for the 2022-23 marketing year were unchanged, soybean analyst Wang Yu noted that domestic soybean production in the new season had risen significantly, raising supply and leading to a general decline in local prices, mainly in the key production regions in Northeast China.
“The average wholesale price range of domestic soybeans is expected to be CNY 5,8000-6,000 per tonne ($831-860 per tonne), 8.8% lower against the average price from last year,” Wang said.
This contrasted against higher import costs, as a combination of political tensions in Brazil, drought affecting soybean planting in Argentina and stronger international vegetable oil prices have supported an upward shift in international soybean prices.
The average price range of imported soybeans after CIF tax is estimated to rise by 3.2% against the previous year to around CNY 5,000-5,200 per tonne ($716-745 per tonne).
Lastly, rapeseed production in China is progressing well, with the report highlighting the potential impact of lower rainfall and low temperatures which could affect crops in the south of the Yangtze River in later months.
A recap of the estimates for the 2022-23 marketing year, from October 1 to September 30 is as follows:
