eFeedLink - China Corn Weekly: Prices stabilise on government buying (week ended Dec 28, 2008)

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December 29, 2008

China Corn Weekly: Prices stabilise on government buying (week ended Dec 28, 2008)

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Price summary

Price falls abated in most regions.

Weekly transacted prices of second-grade corn in China (Moisture content 14%)
Region	Price type	Price as of Dec 28 (RMB/tonne)	Price as of Dec 21(RMB/tonne)	Price change(RMB/tonne)
Heilongjiang	Ex-warehouse	1,340	1,360	-20
Jilin	Ex-warehouse	1,350	1,350	0
Dalian Port	FOB	1,480	1,480	0
Hebei	Delivery Price	1,340	1,360	-20
Henan	Delivery Price	1,380	1,380	0
Shanxi	Ex-warehouse	1,360	1,360	0
Shandong	Delivered-to-feedmill	1,400	1,420	-20
Jiangsu	Rail Station	1,440	1,440	0
Shanghai	Rail Station	1,460	1,460	0
Zhejiang	Rail Station	1,550	1,550	0
Jiangxi	Rail Station	1,550	1,550	0
Hunan	Rail Station	1,560	1,560	0
Hubei	Rail Station	1,540	1,540	0
Sichuan	Rail Station	1,640	1,640	0
Guangdong	CIF	1,580	1,540	40
Southern part of Guangxi	CIF	1,600	1,570	30
Fujian	CIF	1,580	1,580	0
All prices are representative and are for reference only. RMB1=US$0.1462 (Dec 29)

Market analysis

Corn prices were lower in some regions.

Many small and medium-size deep corn processing factories were forced into bankruptcy or suspended their operations temporarily amid poor general economic situation. This thus weakened the demand for corn.

Sluggish livestock replenishment activity also affected corn demand for feed.

However, as the government has set out to purchase 20 million tonnes of corn for its reserves, corn prices stabilised in some regions and even rose in Guangdong and Guangxi.

Market forecast

The government will likely implement more measures to prop up price of agricultural commodities. However, farmers who are holding on to abundant supplies of corn will be eager to release their supplies prior to the Spring Festival in end January. Corn prices are thus seen weaker in the near-term as supply will likely exceed demand.