China corn prices rise on drought concerns; feedmeal demand up

 

 

China corn prices in the major producing areas were generally higher in the week to Wednesday on drought concerns, while a recovery in the feedmeal industry also offered some support, according to analysts.

 

Prices at the major grain trading center in Heilongjiang province, the biggest producer, were RMB1,450-RMB1,740 a tonne, versus RMB1,460-RMB1,680/tonne a week ago.

 

Prices in Shuangliao in the northeastern province of Jilin were RMB1,630-RMB1,640/tonne, up RMB10-RMB20.

 

In an updated report issued Wednesday, China National Grain and Oils Information Centre, a state-supported think-tank, cut its corn output estimate for this year by one million tonnes to 165.5 million tonnes despite an increase in acreage forecast. This translates to a 0.3-percent decline in output from a year earlier.

 

The centre said the fall was due to a reduction in unit yields following a drought in major producing areas in the northeast.

 

But Shanghai JCI expects China 2009 output to fall 19.97 million tonnes, or 12 percent, to 145.94 million tonnes.

 

China sold 1.86 million tonnes of corn from its reserves Tuesday (Sept 8), slightly below what it sold last week.

 

The volume sold was 64 percent of the 2.9 million tonnes it planned to sell.

 

Big industrial processors in the northeastern producing areas have stopped purchasing from the market as they are eligible for a state subsidy of around RMB150/tonne for a total of 5.77 million tons of reserved corn.

 

US$1 = RMB68.2993 (Sept 9)