October 28, 2010

China corn prices nudge higher on strong demand

Corn prices in China's major producing areas rose slightly in the week to Wednesday (Oct 27), spurred by a rally in futures and robust demand in the physical market.

Prices in Changchun, Jilin province, were around RMB1,800-1,810 (US$269-270)/tonne, up RMB40 (US$6) from a week ago.

Prices in Harbin, Heilongjiang province, were around RMB1,860-1,880 (US$278-281)/tonne, mostly unchanged despite analysts' expectations that they would rise.

Corn futures on Dalian Commodity Exchange have been setting fresh records this week due to expectations of strong demand and possible weather-related shortages in the US.

"Spot corn prices in northeastern ports and also Shandong province have been affected by the futures market," said an analyst.

Demand remains strong in the physical market, as buyers remain bullish on price prospects.

At a government auction of corn reserves Tuesday, 29% of the one million tonnes offered was sold, up from 21.6% of 995,000 tonnes a week earlier.