China's weekly corn auctions see lower price

China sold 94% of the corn offered at a weekly government auction in the northeast on Tuesday (Jun 1), with the average price down 3% from last week as Beijing restricted the number of bidders, according to traders.

A total of 924,500 tonnes of corn out of 984,700 tonnes on offer were sold for an average RMB1,679 (US$245.8) per tonne, down 2.6% from last week.

Beijing restricted bidding to feedmills, and again asked feedmills to provide certificates and numbers for their breeding stocks late last week. "The number of bidders has fallen a lot as many failed to provide certification before Tuesday's bidding," said an analyst from Shanghai. He said supply remained tight in most areas.

In an effort to cool domestic prices, Beijing has pledged to crackdown on hoarding by trading companies. Corn processors were also banned from joining the bidding to ensure supply for feed production.

The easing of domestic corn prices could encourage feedmills to reduce imports from the US, from which Chinese buyers have booked about 600,000 tonnes. But some traders said state-owned trading house Cofco was still seeking imports after having sold all the cargoes it booked from the US, which was about 500,000 tonnes.

"There is little room for domestic corn prices to rise further. Feedmills could shift to wheat because of high corn prices," said a corn trading manager in Jilin, the country's top corn area.

China has said its wheat crop now under harvest is slightly higher than last year, despite damage in some areas due to a cold spring.