China corn prices stay largely flat in run-up to holidays

Corn prices in China's major producing areas stayed largely stable in the week to Wednesday (September 30), falling slightly in some areas as output from a new crop starts reaching the market.

Prices in major producing Shandong province were around RMB1,890 (US$276.84) a tonne, down a tad by RMB10/tonne from a week earlier, said Xiong Mingqi of Beite Futures. In Jilin province and Harbin, a city in Heilongjiang province, they were unchanged at RMB1,620/tonne and RMB1,600/tonne, respectively.

"Some new corn has come on the market, so there's more supply," Xiong said.

Demand weakened slightly in the run-up to China's National Day holiday break, which kicks off Thursday. Feedmeal demand had ratcheted up ahead of the holidays, but tapered down closer to the start of the eight-day celebrations. Still, longer-term corn prices are supported by downward revisions to the country's 2009-2010 output.

The US Grains Council Monday (September 28) forecast a 9.7 percent decline from a year earlier in Chinese corn production to 148.79 million tonnes this year due to drought, but said government stocks of the commodity were enough to meet demand.

The revised estimate undercuts a forecast in September by the China National Grains and Oils Information Centre of 165.5 million tonnes, though China's largest grain trader and corn processor COFCO Ltd. last week already estimated the crop at 148 million tonnes.