June 7, 2007

 

China corn prices steady at high levels, but face pressure

 

 

Corn prices in China's major corn producing regions mostly held steady at high levels in the week to Wednesday (Jun 6), with prices in some areas rising on increasingly tight supply.

 

In Jilin, China's largest corn-producing province, prices of average-quality corn were quoted around RMB1,400-1,500 a tonne, compared with RMB1,420-1,480 a week earlier.

 

Prices in Heilongjiang province, another major corn-producing region in the northeast, were between RMB1,300-1,400/tonne, unchanged from the week before.

 

Average prices in Shandong province were at RMB1,500-1,620/tonne, slightly higher from RMB1,500-1,600/tonne a week-earlier.

 

Although processing plants raised their purchase prices for corn, traders were still reluctant to sell on expectations of higher prices due to tight supply.

 

Farmers don't have much corn stocks on hand, while rising transportation costs also drove prices higher, traders said.

 

However, the feed meal sector's slow recovery may pressure corn prices in the coming weeks.

 

High corn prices will also likely damp processing plants' willingness to purchase more corn, and curb the rise in corn prices as a result, China Cereal Network said.

 

Corn prices are likely to consolidate at current high levels in the short term, and weather conditions in planting regions are key to corn prices, it said.

 

China has completed most of its corn planting, and more will be planted after the wheat harvest season in June.