China corn prices mostly stable; spring planting underway

 

 

Corn prices in China's major producing areas were mostly stable in the week to Wednesday (May 13) in light trading as farmers were busy with spring planting.

 

Prices in big producer Heilongjiang province were between RMB1,440-RMB1,530 a tonne, stable from a week ago.

 

In Baicheng in Jilin province, prices were between RMB1,520-RMB1,540/tonne, also unchanged.

 

Farmers were very reluctant to sell corn, as they have limited amounts on hand and have been busy with planting, the Jilin Provincial Grain Administration said in a note.

 

The government has completed its corn purchases in northeast producing areas, which have supported local prices.

 

Corn planting in the northeast will be completed by the end of May.

 

Some analysts said state reserve houses in northeast producing areas face reserve capacity pressure as it has been getting more difficult to preserve the corn during the past few rainy days.

 

"The government now has the opportunity to sell the corn at prices higher than their purchase prices as local prices are higher," said an analyst with Chicorn Network.

 

The government bought the corn from last year's harvest at RMB1,500/tonne.

 

Meanwhile, the development of AH1N1 flu  in China may also damp pork consumption.

 

China confirmed its second case of AH1N1 flu Wednesday.

 

China's economic planner, the National Development and Reform Commission, Tuesday also warned that domestic hog output is excessive.

 

As a result, market participants preferred to stay on the sidelines to wait for the possible release of the government's auction policies for corn, as well as the impact of AH1N1 on feedmeal consumption, said analysts.