Corn fell the most in more than two weeks in Chicago on speculation that rising output in China, the world’s second-largest consumer, will reduce demand for imports from the U.S.

China may have harvested a record 180 million metric tons this year, up from 166 million last year, Caijing Business & Finance Review magazine reported on its website, citing an unidentified company executive. Last year, China was a net importer of corn for the first time since 1996. The government has been selling grain from state-owned inventories to cool the rally in domestic prices.

“Rising China-crop forecasts are a surprise because people have been expecting increased import demand,” said Greg Grow, the director of agribusiness for Archer Financial Services Inc. in Chicago. “People are more concerned that China will not buy U.S. corn later this year.”

Corn futures for March delivery fell 9.25 cents, or 1.6 percent, to close at $5.81 a bushel at 1:15 a.m. on the Chicago Board of Trade, the biggest drop since Oct. 21. Before today, the price surged 58 percent since the end of June, touching a two-year high of $6.175 yesterday, after adverse weather reduced the size of the U.S. crop.

Trading volume reached a record 762,387 futures contracts yesterday in Chicago, and open interest was 1.677 million contracts, the most ever, according to CME Group Inc., the owner of the CBOT.

China Crop Forecast

Chinese farmers collected 154.56 million tons this year, up from an estimated 144.374 million last year, according to an estimate by Geneva-based SGS SA for Bloomberg that was based on interviews with growers during the harvest in September and October. Farmers planted more and favorable weather boosted yields, the survey showed. Chinese corn prices have risen 30 percent in the past year.

Yesterday, the U.S. Department of Agriculture said China produced 168 million tons, up from last month’s estimate of 166 million. The USDA expects consumption to expand by 1.9 percent in China to 162 million tons in the year from Oct. 1.

Today’s price drop also was fueled by speculators reducing their bets on further rallies, Grow said. The close below the Nov. 8 low, after reaching a new high earlier in the day, created a “sell” signal for some traders who monitor historical patterns, he said.

“The reversal yesterday on record volume was a sign of at least a near-term peak,” Grow said. “The market needs to consolidate recent gains.”

Corn is the biggest U.S. crop, valued at $48.6 billion in 2009, government figures show, followed by soybeans at $31.8 billion. The U.S. is the world’s largest grower, exporter and consumer of corn.

NEW YORK (AP) — Chinese fertilizer maker China Green Agriculture Inc. said Wednesday its fiscal first-quarter net income rose 50 percent, helped by an acquisition that boosted revenue.

The company’s net income rose to $7.8 million, or 30 cents per share, up from $5.2 million, or 24 cents per share, during the same period a year prior.

Revenue more than tripled to $39.5 million from $11.3 million.

Analysts polled by Thomson Reuters expected profit of 30 cents per share on $38.4 million in revenue.

The company’s fiscal first quarter ended Sept. 30.

The company said its quarter was helped by the newly acquired Beijing Gufeng Chemical Products Co., which accounted for 55 percent of revenue.

Looking ahead, the company expects net income of 29 cents per share on revenue of $33.1 million to $33.3 million in the second fiscal quarter. The company forecast net income of $1.35 to $1.37 per share on revenue of $150.5 million to $152.8 million for the full fiscal year.

Analysts expect second-quarter net income of 29 cents per share on $33.1 million in revenue and full-year net income of $1.36 per share on $152.4 million in revenue.

Shares of China Green Agriculture rose 70 cents, or 8 percent, to close at $9.48.

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Soybeans surged to a 16-month high after U.S. exporters boosted sales to China, the world’s biggest consumer and importer.

U.S. exporters sold 180,000 metric tons to China for delivery in the marketing year that began Sept. 1, the U.S. Department of Agriculture said. China has purchased 420,000 tons from the U.S. this week, USDA data show. Soybean futures on the Dalian Commodity Exchange have risen 16 percent in the past year in dollar terms to the equivalent of $17.33 a bushel, a 43 percent premium to U.S. futures in Chicago.

“The Chinese are buying $12 U.S. soybeans to sell into a” domestic market where prices a higher, said Jerry Gidel, a market analyst for North American Risk Management Services Inc. in Chicago. “Chinese demand is very strong for feed and vegetable oils” made from soybeans, Gidel said.

Soybean futures for November delivery rose 20.25 cents, or 1.7 percent, to $12.1175 a bushel at 10:10 a.m. on the Chicago Board of Trade, heading for the biggest gain since Oct. 12. Earlier, the price reached $12.1525, the highest level since June 5, 2009. Before today, the commodity gained 32 percent since June 30 on speculation that hot, dry weather reduced U.S. yield potential.

Soybeans also rose on increasing investor demand as a decline in the dollar boosted the appeal of commodities as an alternative to assets priced in the U.S. currency, Gidel said. The dollar fell the most since July 1 against a basket of six major currencies on speculation that the Federal Reserve will ease monetary policy further to spur economic growth.

“The dollar’s decline is supporting new fund investment,” Gidel said.

The soybean crop in the U.S. was valued at $31.8 billion last year, second only to corn at $48.6 billion, government figures show.

Corn fell for a third day in Chicago as favorable weather helped accelerate harvesting in the U.S., the biggest exporter of the grain, and after China imposed anti-dumping tariffs on U.S. chicken shipments.

December-delivery corn fell as much as 2.8 percent to $4.86 a bushel on the Chicago Board of Trade and traded at $4.8775 at 12:48 p.m. Paris time, after slumping 2.5 percent yesterday. November-delivery soybeans lost 1.3 percent to $10.9875, a second day of losses.

U.S. corn and soybean crops were being harvested at a faster-than-average pace, the U.S. Department of Agriculture reported this week. China said Sept. 26 it will impose duties on U.S. broiler chicken products, potentially reducing poultry production and demand for chicken feed.

“The poultry industry devours corn and soybean meal, and any attacks upon poultry exports will push demand down swiftly,” U.S. economist Dennis Gartman said in his daily newsletter. Breeders “can ramp up or ramp down production very, very quickly,” he said.

The U.S. poultry and egg industry uses about 100 billion pounds (45.4 million metric tons) of feed a year, according to the USDA. About 60 percent of the average U.S. poultry diet is corn, with another 25 percent from soybean meal, according to the University of Georgia’s Department of Poultry Science.

Chicken Duty

China this week slapped a duty of as much as 105.4 percent on U.S. broiler chicken products, citing a “causal relationship” between U.S. companies dumping at below-market prices and losses in the Chinese poultry industry. The country consumed almost 800,000 tons of U.S. chicken products in 2008, according to the USA Poultry & Egg Export Council.

About 27 percent of the U.S. corn crop and 17 percent of the soybeans were harvested as of Sept. 26, the U.S. Department of Agriculture said in a report. That compared with a five-year average of 15 percent for corn and 13 percent for soybeans.

“Harvest progress in the U.S. is spectacular, for corn as well as soybeans, thanks to very forgiving weather,” Paris- based farm adviser Agritel said on its website today. “Sales are nourished by harvest pressure in the U.S. and precautionary position closings ahead of the USDA report tomorrow.”

The USDA is scheduled to release its estimate of the nation’s quarterly stockpiles of soybeans, corn, wheat, and other grains on Sept. 30.

Weather Outlook

Dry weather during the next 15 days in corn and soybean areas would firm muddy soil and allow access for heavy farm machinery after rains slowed fieldwork, said Don Keeney, an agricultural meteorologist at MDA Information Systems Inc.

“Prices of corn and soybean are going down because of improved crop outlook in the U.S.,” which will continue to weigh on prices this week, said C.S. Oh, head of overseas futures at NH Investment & Futures Co., by phone from Seoul.

About 21 percent of the fields in Kansas, the biggest U.S. winter-wheat producer, were seeded, up from 11 percent a week ago, according to the USDA.

Wheat for December delivery slumped 2.5 percent to $6.6775 a bushel after touching $6.665, the lowest level since Aug. 2, amid favorable sowing weather.

“Winter wheat planting prospects in both the U.S. Midwest and Russia are likely to improve over the coming weeks due to forecast rainfall,” Luke Mathews, a Sydney-based agricultural commodities strategist at Commonwealth Bank of Australia, wrote in a report.

Milling wheat for November delivery traded on NYSE Liffe in Paris fell 3.9 percent to 202.50 euros ($275.60) a ton.

The northeastern region, including the provinces of Heilongjiang, Jilin and Liaoning, produces more than 30 percent of China’s total grains, according to the newspaper.

The potato, known as “foreign yam” in Chinese, was once planted in China as a life-saving food to survive famines.

But as China moves towards being the center of potato production in Asia, the humble potato is now bringing wealth to some in western China who had been living in poverty.

Chen Chunlan, a potato farmer in Dingxi in northwest China’s Gansu province, now lives a satisfying life in her newly-built, well-furnished home.

Chen credits her potato fields for the improved standard of living — they provide her with an annual income of 70,000 yuan ($10,400).

But Chen clearly recalls the hard times not long ago, when local peasants often had to worry about their next meal.

“We used to grow wheat, but the meager harvest could barely feed us, let alone allow us to save some money,” said Chen.

In 2001, destitution even forced Chen to flee Dingxi to try to earn a living in another place.

Dingxi, with its cold and arid climate and hence low agricultural yield, has long been listed as one of China’s poorest regions.

In 1995, a severe drought hit Dingxi, and almost everything in the fields withered. But to the locals’ surprise, the potatoes survived the catastrophe.

“Potatoes are amazingly drought-resistant and can acclimatize well to Dingxi’s agricultural conditions,” explained Wang Yihang, the provincial potato expert.

Next year, the Dingxi government launched the “Potato Project” to popularize the cultivation of potatoes to guarantee basic food supply.

Dingxi grows more potatoes than any other city in China, boasting over 200,000 hectares of potato fields, or one third of the city’s arable land.

Thanks to the edible tuber, the city no longer has a food supply problem, and attention has shifted to making the “food of the poor” a major export.

“Some freshly harvested potatoes are transported to wholesale markets all over China on special trains, while others are processed in local plants,” said Yang Zixing, party secretary of Dingxi city, referring to the city’s 20 large factories that turn the smaller, unsuited-for-sale potatoes into starch or potato chips. Previously, these potatoes would have been discarded or used for pig feed.

Some companies have struck deals with Simplot, McDonald’s french-fries supplier, to grow and process high-quality potatoes.

The city’s potato-processing factories are the source for 25 percent of the local farmers’ income.

Dingxi’s success story suggests a bright future for potato cultivation in China, as cultivation of the tiny tuber rapidly expands into China’s western regions.

“Over 4.7 million hectares of arable land in China are now growing potatoes, up from 2.7 million in the 1980s,” said Wang.

“Most of the increased potato cultivation is in China’s poor western regions — the provinces of Gansu, Shaanxi and Qinghai, and the Ningxia Hui autonomous region.”

The potato has proven to be more suitable than rice and wheat for cultivation on western China’s arid, barren lands, playing a major role in relieving starvation in these regions.

Furthermore, surging demand for potato products like starch can galvanize these less-developed regions to quickly industrialize.

“Potatoes can be made into materials or ingredients that are needed in food processing, papermaking, pharmaceuticals, textiles and many other industries,” said Wang.

And although in China potatoes are traditionally not a staple food as they are in many other parts of the world, it is nevertheless an integral part of Chinese cuisine.

Potato-based snacks are also becoming popular in China, especially after western fast food giants like McDonald’s and KFC began selling french fries.

Given the market potential and adaptability to arid areas, the potato may well be a new industrial star in China’s west.

XINHU FARM, Xinjiang – Xu Yulan arrives at a cotton field on the Xinhu Farm after walking some three kilometers from her lodge.

When the dew on the plants evaporates, she will pick cotton for the first time this year.

She arrived at the farm, located about 130 kms northwest of Xinjiang’s capital Urumqi, at the end of August, only to spend most of her first few days there plucking tomatoes.

“I prefer plucking cotton,” Xu, 42, a slim villager and experienced cotton picker from Central China’s Henan province, said on Wednesday.

“It’s free of dirt and much cleaner,” she added.

The farm’s 13,000-hectare cotton field, where Xu and an estimated 15,000 cotton pickers from outside Xinjiang work, accounts for only a fraction of Xinjiang’s total output.

For Xinjiang, a Uygur autonomous region in Northwest China that produces one-third of China’s cotton, the number of non-local cotton pickers will swell to more than 300,000 this year, according to official estimates.

The number has fallen from previous years, as Xinjiang reduces its cotton fields and uses more machinery to cut down on rising labor costs.

Now in her 10th year at the Xinhu Farm, Xu will earn 1.2 yuan (18 cents) for every kilogram of cotton she picks, about 50 percent higher than last year.

As a picker with extraordinarily adroit hands, Xu said she can pluck up to 180 kgs of cotton a day, enabling her to earn up to 200 yuan a day during the month-long harvest.

That makes her 44-hour train journey and three-hour bus trip to the farm worthwhile. Lacking other skills, she would otherwise be sitting around if she stayed in her home village after the summer harvest.

Widely thought of as arduous work, cotton picking requires workers to remain bent over in the autumn sun.

Like her fellow workers, Xu wears a cap with a long visor and carries large sacks with a strap around her waist, as she makes her way along the 100-meter rows of cotton.

Unlike some pickers, however, she does not wear gloves to protect her fingers from being cut by the plant. Years of experience have allowed her to move her hands freely among the plants without being hurt.

When half the sack is filled with cotton, Xu sits on it to continue picking.

“I then don’t need to stand and bend down all the time,” she said.
By sunset, Xu has done her day’s work and returns on foot to her lodge with the other cotton pickers.

Their agent, who is also from Henan province, brought heaps of flour and cabbage to their temporary home and hired a cook from their hometown to make meals for the 200 or so cotton pickers who live there.

“We have steamed buns and cabbage soup for dinner,” said Xu, apparently satisfied with life on the farm.

“It is a pity we don’t have a TV here,” she added.