May 23, 2007

 

China corn prices higher on tight supply, dry weather
 

 

Corn prices in major producing regions of China were mostly higher in the week to Wednesday (May 23) due to tight supply.

 

While the sowing season has almost ended, dry weather in planting areas is not good for corn crops, said analysts.

 

If the dry weather continues, the corn output may not reach current expectations, helping to push prices higher, said Yide Futures.

 

In Jilin, China's largest corn-producing province, prices of average-quality corn were quoted at about RMB1,460-1,480/tonne, up from about RMB1,420/tonne a week ago.

 

Prices in Heilongjiang province, another major corn-producing region in the north-east, were between RMB1,380-1,400/tonne, higher than RMB1,300-1,380/tonne the week before.

 

Average prices in Shandong province were at RMB1,560-1,600/tonne, up from about RMB1,550/tonne.

 

Farmers were not eager to sell due to lower stocks and the expectation of higher prices.

 

High temperatures and limited rain in major corn producing regions have delayed the corn planting process and will affect corn growing, said analysts.

 

Rising land prices will also likely lead to higher costs, they added.

 

But corn prices will not surge due to slow recovery of the feed meal sector, the use of wheat as a feed meal substitute and high stocks due to fewer exports.