January 17, 2007

 

China corn prices little changed; ignore gains in futures

 

 

China's corn prices in major producing regions were little changed in the week to Wednesday, shrugging off strong gains in the futures markets.

 

"Corn prices are RMB200-RMB300 a tonne higher than a year ago, and farmers are generally satisfied with the current prices," said Wang Shiliang, an analyst at Jilin Grains Center.

 

"Besides, there was little change on the demand side in the past week, keeping the market balanced," Wang added.

 

In Jilin, China's largest corn-producing province, the prices of average quality corn were quoted at RMB1,080-RMB1,160/tonne, the same as a week earlier.

 

Prices in Heilongjiang province, another major producing region in the northeast, were RMB20-RMB30 lower than those in Jilin, which were almost unchanged from last week.

 

"There was a slight increase in some places, but overall, prices now find it hard to rise further, despite gains in futures prices," said a trader.

 

Corn futures traded on the Dalian Commodity Exchange hit 4 percent limit-up Monday, following Friday's sharp gains in CBOT soybean futures.

 

Analysts said that as corn prices are at a historically high level, end users are now trying their best to control costs.

 

But on the other hand, strong domestic demand is still underpinning prices.

 

"It's unlikely to see big fluctuations before the Spring Festival. Even government auctions are unlikely to affect it either," the trader said.

 

Jilin province is scheduled to sell 304,454 tonnes of corn Saturday through public auction.