October 11, 2007

 

China corn prices mostly stable; awaits new corn supply

 

 

Corn prices in China were mostly stable in the week to Wednesday, as traders waited for new corn to enter the market in late October.

 

Traders were reluctant to sell old corn at lower prices, as they expected new corn prices to be higher than last year due to a likely drop in production, said Wang Shiliang, a trader at Jilin Grains Centre.

 

In Jilin, China's largest corn-producing province, prices of average-quality corn were quoted around RMB 1,400-RMB 1,500 per tonne, stable from levels prior the week-long National Day holiday last week.

 

In Heilongjiang province, another major corn-producing region in the northeast, prices were at RMB 1,300-RMB 1,390 a tonne, also unchanged from pre-holiday levels.

 

Average prices in Shandong province were at RMB 1,600-RMB 1,640 a tonne, narrowing from RMB 1,560-RMB 1,680/tonne.

 

Analysts expected an earlier drought in major corn producing regions to cause a drop in corn output this year, though the decline is unlikely to be very large due to increased corn acreage.

 

China's corn output last year was 145.48 million tonnes, according to data from the China National Grain and Oils Information Centre.

 

Analysts expected old corn prices to remain stable ahead of the new supply.

 

Increasing demand from the recovery of the feedmeal sector and lower output will likely push new corn prices higher, but increases will be capped by state sales of old corn, said China Corn Network.