China Grain Center Lifts Soybean Output Forecast 6%

By William Bi

Aug. 6 (Bloomberg) -- China, the world's biggest soybean consumer, may harvest 6 percent more of the oilseed than previously expected as farmers boosted planting and favorable weather aided crop growth, a state-owned forecaster said.

Output may rise 37 percent from a year ago to 17.5 million metric tons, the China National Grain and Oils Information Center said today in an e-mailed report. That is 1 million tons more than the center's projection last month.

China's higher output may slow its growth in soybean imports, which are set to reach a record 34.4 million tons in the year through Sept. 30. A slow-down in China's buying may add to pressure on the commodity traded in Chicago, which is near a three-month low on the prospect of improved U.S. crops.

``The tone of a bumper soybean crop this year was set'' after extensive rains in China's main grain-growing region this month, Li Jianlei, analyst at Cofco Co., said in an e-mailed report today. ``Soybean prices may be poised to fall further.''

China's northeast, the nation's largest growing area for corn and soybeans, may have above-average temperatures in the first 10 days of August, aiding soybean pod-forming and corn silking, the National Meteorological Center said last week.

Farmers planted 9.65 million hectares (23.8 million acres) of soybeans in the spring, a gain of 11 percent or 950,000 hectares from 2007, turning some corn-growing land to the more profitable soybeans, the center said. That switch helped cut corn plantings by 0.7 percent to 27.9 million hectares, it said.

Yields Rise

Still, corn output may gain by 4.2 million tons from a year ago to 156 million tons because average yields in the coming harvest is expected to jump significantly from last year's drought-hampered crops, the center said. This year's total output was revised up by 2 million tons from 154 million tons in the center's forecast on July 8.

Rice production may gain 0.5 percent to 186.5 million tons, up from the center's projection of 185.7 million tons last month, it said. The center left output of wheat and rapeseed unchanged at 112.5 million tons and 11.5 million tons respectively.

The following table details crop forecast by the center.

===============================================================

2007* 2008(July) 2008 (Aug) %Change

(YoY) =============================================================== Production (in million tons)

Corn 151.8 154.0 156.0 2.7

Wheat 109.9 112.5 112.5 2.4

Rough rice 185.5 185.7 186.5 0.5

Soybeans 12.8 16.5 17.5 36.7

Rapeseed 10.6 11.5 11.5 8.5

Planted area (in million hectares)

Corn 28.05 27.70 27.85 -0.7

Wheat 22.98 23.00 23.00 0.1

Rice 29.23 29.20 29.20 -0.1

Soybeans 8.02 9.50 9.65 10.9

Rapeseed 5.60 6.40 6.40 13.3 ===============================================================

*The center cited revised 2007 figures by the National Bureau of Statistics

To contact the reporter for this story: William Bi in Beijing at wbi@bloomberg.net