August 5, 2010

Wet weather holds China corn prices still

Corn prices in major producing areas in China were unchanged in the week to Wednesday (Aug 4) as bearish pressures from corn imports were offset by wet weather.

Heavy rain has hit some corn-producing areas, raising the risk of crop failures and underpinning prices.

Prices in Changchun in Jilin province were around RMB1,790-1,800 (US$264-$266) a tonne, flat from a week ago, data from the China Grains Network research showed.

Prices in Meihekou in Jilin were steady around RMB1,840-1,860 (US$272-$274)/tonne, with trade thin.

However prices were not across the board, with some areas with growing livestock and low corn stocks seeing price increases.

In Xiao County, Anhui province, such market conditions raised corn prices, though by relatively minor magnitudes of about 1%.

Trade in physical corn has tapered off since the end of a rebate tax policy on corn starch and ethanol dampened buying interest, the grain research said. Increasing imports from the US are adding to the downward pressure on prices.

Overall domestic corn acreage and current harvest conditions still indicate a largely stable output compared to last year, analysts said.