December corn futures fell 3.5% on the week and nearly 19% on the month as markets began to price in a potential recession in the US and Europe – a situation that stands to weaken demand for food, animal feed and fuel made from corn.
 
However, corn’s losses may be limited in the short term by speculation about China possibly having to purchase corn from the US, the largest grower and exporter, to satisfy internal demand. According to the China’s Ministry of Agriculture, China will need a ‘huge effort’ to meet growing corn demand, as an increasing number of people are consuming more meat products. This situation is pushing China to experiment with genetically modified corn to artificially boost production. Vice Minister Chen Xiaohua said that in order ‘to maintain balanced supply and demand for corn, we must fundamentally develop production’.
 
China is ‘experimenting’ with the use of genetically modified corn to help lift output, Mr Chen said. The government has already approved the safety of the strain, he said, without elaborating. In the meantime, Morgan Stanley’s Hussein Allidina recently told Bloomberg that US corn stockpiles may have fallen to 882 million bushels as of 1 September – which is around 38 million bushels less than the US Department of Agriculture (USDA) had forecast. ‘We expect a moderately bullish report for corn,’ the analyst wrote, predicting that feed and residual use may have been higher than forecast by the US agency, draining inventories. The next USDA report on US quarterly stockpiles is due on Friday 30 September.