April 23, 2009

China's corn prices in major producing areas were higher in the week to Wednesday (Apr 22), as processing plants competed for the crop.

Corn prices in Songyuan in the major producing province of Jilin were between RMB1,520 and RMB1,540 a tonne, up RMB10-RMB20/tonne from a week earlier.

Corn prices in Weifang in Shandong province were between RMB1,540-RMB1,580/tonne, up RMB20/tonne on the week.

Expectations of higher corn prices have led to hoarding of corn stocks by traders and users, said analysts.

The government controls a large amount of the corn available, so its policies are very important in deciding the price trend, and it has been reiterating its stance in support of grain prices to encourage farmers' interest in planting.

Rains in some producing areas also helped to support prices as it reduces new supply.

Corn prices in the southern consumption areas were lower as feedmeal demand remained weak.

However, an analyst with Chicorn Network said feedmeal demand is likely to pick up in May and June, which are traditionally peak periods for raising livestock.

Corn prices are likely to consolidate in the near term as they will likely lose momentum after the government completes its purchases of the crop from local markets at the end of this month, Nanjing Grain Network said in a note.

US$1 = RMB6.82909 (Apr 23)