March 1, 2007

China's corn prices stable; sluggish trade seen

Corn trade in China's major corn-producing regions was very light in the first three days after the week-long Lunar New Year holiday, with few deals done.

Corn prices remained stable at pre-holiday levels.

Before the holiday, the prices of average quality corn were quoted at RMB1,040-1,160/tonne in Jilin province and around RMB1,020/tonne in Heilongjiang province.

Government offices, businesses and financial markets were closed Feb 19-23. But farmers usually have a longer break, which can last as long as a month.

Trade is likely to be active only after the 15th day of the Lunar New Year, on March 4, when festivities usually start to wind down.

But any purchase is unlikely to be large as stocks are still ample, Wang Shiliang, a trader at Jilin Grains Centre, said Wednesday.

Meanwhile, farmers will be keen to sell corn in March due to warmer weather conditions, which make storage more difficult, thus putting more downward pressure on cash prices, he added.

Farmers are also in need of cash for the coming planting season in April.