China expects bumper grain harvest, adding pressure on corn prices

China expects another bumper grain harvest in 2026, which could increase pressure on domestic prices and limit import demand. According to China’s National Bureau of Statistics, combined production of summer grains and early rice reached 179.04 mln tons, up 780 thsd tons, or 0.4%, year-on-year. Autumn crops are also reported to be in favorable condition, supporting expectations of a large overall grain harvest this year. According to SunSirs analysts, these forecasts are easing concerns about a potential decline in production and weakening price expectations in the grain market.

The corn market is facing the strongest pressure from increasing supplies. New-crop grain is gradually entering the market in northern and northeastern China, boosting available volumes. Meanwhile, traders and feed manufacturers remain cautious about purchasing, expecting further price declines. Despite the large pig population, weak profitability in livestock production is discouraging the accumulation of substantial feed grain stocks. Processing companies are also showing limited purchasing interest due to modest processing margins.

Analysts expect corn prices to remain under pressure during the peak period of new-crop sales, with stabilization possible once farmers complete the main wave of grain marketing. However, government purchasing mechanisms, high moisture levels in newly harvested corn and limited supplies of high-quality grain could prevent a sharp decline in prices. A large domestic harvest could also reduce China’s need for imported corn, although actual import volumes will depend on the relationship between domestic and global prices, as well as the pace of grain sales.

Factors limiting price increases are also prevailing in the wheat and rice markets. A substantial summer grain harvest and high wheat stocks are ensuring ample domestic supplies, while demand from flour mills remains subdued. In the rice market, the arrival of the new crop and large inventories held by processors are weighing on purchase prices. At the same time, premium rice varieties may maintain a price advantage, while government minimum purchase price policies will limit the potential for significant price declines.

The soybean market follows a different pattern from other grain markets, as China remains heavily dependent on imports. Therefore, a large domestic grain harvest will have a limited direct impact on soybean prices, which will be driven primarily by weather conditions in the United States and Brazil, the pace of imported soybean arrivals and crushing margins. Overall, SunSirs analysts expect China’s grain market to remain influenced by ample supplies, subdued demand and government price support mechanisms. These factors will limit the potential for grain price increases, while future market trends will depend on the pace of crop sales and purchasing activity among processing companies.

Tags: China, corn, grain