BEIJING, Sept 8 (Reuters) - Chinese corn futures fell nearly 2 percent on Friday, their biggest one-day drop in more than three months, as some speculators pulled out of the market ahead of a bumper harvest.
The most active futures contracts on the Dalian Commodity Exchange fell 1.92 percent to 1,699 yuan ($263.13) per tonne on Friday, its biggest drop since April.
“Investors who were long in corn had to go as seasonal pressure kicks in with the new harvest,” said Meng Jinhui, an analyst at Shengda Futures.
Corn grown by the world’s No. 2 producer usually hits market in mid-September. Prices had rallied after China slashed its 2017/18 corn output estimates on concerns that drought earlier in the year may have forced some farmers to switch to other crops like soybeans.
But a government think tank increased its forecast for 2017/18 corn output on Friday following good weather in major production areas during the maturing period of the new crop, sparking the price drop, analysts said.
China National Grain and Oils Information Center put its 2017/18 corn output forecast at 212.5 million tonnes, up 1 million tonnes from a previous forecast in August.
Ample rains in August in major production areas brought relief to parched fields hit by drought earlier and as good weather is forecast to continue in September, output is likely to grow, the government grains centre said in a report.
“Some speculators bullish on corn have left the market as corn gradually gets back to its supply-demand fundamentals. There are high stocks at the ports. Imports of barley and sorghum are high,” said a futures trader, who did not want to be identified as he was not authorized to speak to the media.
Chinese corn starch futures on Dalian Commodity Exchange also fell on Friday, dropping 1.11 percent to 1,953 yuan per tonne.
$1 = 6.4570 Chinese yuan Reporting by Hallie Gu and Dominique Patton; Editing by Tom Hogue