May 7, 2009

China's corn prices in major producing areas were mostly stable in the week to Wednesday (May 6) as farmers don't have much the latest crop left but demand remains weak.

Corn prices in Yongji in Jilin province were between RMB1,490 and RMB1,500 a tonne, unchanged from a week earlier.

Corn prices in Dezhou in Shandong province were between RMB1,470 and RMB1,540/tonne, also stable.

Trading was very light as farmers in major northeastern producing areas have limited stocks left following the government's aggressive purchases, while weak feedmeal demand damped buying interest from processing plants and traders, said analysts.

Concerns about the spread of A/H1N1 flu virus, have been weighing on corn prices by reducing hog breeders' demand for feedmeal, China Corn Network said in a note.

Traders were also unwilling to build up large stocks of corn due to expectations that prices could fall further, it said.

However, corn prices were higher in some areas where supply has dwindled.

Corn prices are likely to rise ahead of the autumn harvest as there are limited supplies in the market and the government will try to sell the corn it bought at prices higher than the purchase prices later this year, some analysts said.

US$1 = RMB6.82135 (May 7)