For the third year in a row, China will harvest a large amount of corn reserves of about 4. 5%.

The Chinese government is likely to store large amounts of corn for the third year in a row in the 2014 15 market year, as domestic demand is unlikely to recover quickly and supplies are plentiful, according to industry analysts.

China is the world's second-largest consumer of corn; analysts say it is likely to store about 40 million tonnes of corn in 2014, down from a record high of 60 million tonnes last year.

Industry sources have cited the surge in Chinese corn stocks as the main reason for its rejection of cheap US corn. China had previously rejected large shipments of US corn because it was found to contain unapproved imports of genetically modified ingredients.

Analysts said the expected inventory growth could further delay the import approval process, which is already two years longer than originally expected.

The new reserves will bring government inventories back to 100 million tons, according to a senior analyst at an industry consulting firm.

"with such a large inventory, we do not expect import controls to be relaxed."

The government will also announce its reserve price soon, and analysts expect it to be unchanged from last year's level of 2220-2260 yuan per ton.

Although the price gap between US corn and domestic corn is the largest on record, feed mills will not look for US corn after China has rejected 1.25 million tonnes of US corn since November because it contains MIR162 genetically modified ingredients that have not yet been approved by China's Ministry of Agriculture.

Us corn production is set to hit a record high, dragging the price of the CBOT corn futures benchmark contract to a four-year low earlier this month.

The Chinese government has sold 29 million tonnes of state-owned corn reserves since May, two years after stockpiles brought the reserves to a record high of 100m tonnes.

Most of China's corn crops are unaffected by the summer drought, and the yield reduction caused by weather damage has been small.

Harvesting is under way, and corn production is expected to reach the second highest level in history, according to the National Grain and Oil Information Center (CNGOIC).

It may take time for corn demand to recover after bird flu outbreaks cut demand for livestock feed, food safety concerns and an economic slowdown hurt the pig industry in the first half of the year.

"there is no sign of any improvement in livestock demand, and corn processors are still losing money," said an analyst at a futures company. "

"the best guess is that demand will grow by 2-3% next year."

China's animal feed production fell 3% in the first half of 2014 compared with the same period last year, the biggest drop in the same period, according to the China Feed Industry Association.

Feed production fell in 2013 for the first time in a decade.

The stock of pigs has begun to increase, but it is still 5.9% lower in August than in the same period last year. The stock of breeding pigs fell by 10% in August compared with the same period last year.

The National Grain and Oil Information Center estimates that China's corn consumption in 2014 will increase by 3.9% to 189 million tons over last year.