A drought in China's north-east corn belt may cut output of the grain in two major provinces by about 3.5 million tonnes, about 1.5 percent of the nation's estimated annual output, according to an official think-tank's initial estimate. The drought conditions may ease after heavy rains which are expected in the coming days, the China National Grain and Oils Information Center (CNGOIC) said on Friday.
Lower corn output in the world's second-largest consumer of the grain comes at a time when China is sitting on record stocks of close to 100 million tonnes and the world's top exporter, the United States, is on track for record production. That would mean global prices are unlikely to be impacted by the drop in China's output. Benchmark Chicago corn futures are trading around their lowest in four years. Some of the areas in the provinces of Jilin and Liaoning may lose output by as much as 50 percent, said CNGOIC. Jilin is the country's second-largest corn-producing province while Liaoning is the 7th largest.