June 23, 2011

 

China's corn prices gain further on tight market
 

 

Corn prices in China's major producing areas extended gains in the week to Wednesday (Jun 22), as low stocks with farmers and strong demand from feedmills and processors continued to underpin prices.

 

Prices in major cities in Heilongjiang, the nation's top corn-growing province, rose about RMB10 (US$1.55) from a week earlier to RMB2,050-2,170 (US$317-336)/tonne, while prices in the eastern province of Shandong, where feed mills and processors have a heavy presence, rose about RMB10 (US$1.55)/tonne to RMB2,250-2,400 (US$348-371)/tonne.

 

High corn prices have prompted feed mills to use more wheat as a substitute, as corn prices in some areas have risen about 20% this year, while wheat prices have been largely stable.

 

Using more wheat in animal feed will curb some of the demand for corn and prevent corn prices from rising further, the China Corn Network, a consultancy tracking the corn market, said in a research note.

 

However, soaring pork prices are expected to continue to underpin corn prices, as it remains the most popular raw material for animal feed, analysts said.

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