China's corn prices were lower in the week to Wednesday (October 15) as the harvest season continues and as feedmeal plants reduced their purchases in expectations of lower prices.

 

Corn prices in Changchun in the major-producing Jilin province were around RMB1,520 a tonne, down RMB80/tonne from the week before. In Shekou port in Guangdong province, corn prices were between RMB1,780 and RMB1,800/tonne, compared with RMB1,780-RMB1,820/tonne a week ago. Corn prices in Qinhuangdao in Hebei province were around RMB1,660/tonne, down RMB20/tonne.

 

As corn harvest is going on smoothly, China is on track to see corn output increase this year.

 

Trading is light due to sluggish starch and feedmeal demand, China Corn Network said in a note. But farmers are reluctant to sell as input costs rose around 40% this year, it said. Tumbling futures prices are also helping to weigh on cash prices.

 

Corn futures traded at the Dalian Commodity Exchange have fallen 8 percent from mid-September levels after the latest flare-up in the credit crisis.

 

However, as new corn is unlikely to enter the market in large volumes until November, the limited availability of old stocks will help to support the prices, said analysts.

 

Corn prices are likely to consolidate around current levels in the near term, Beijing Grain Bureau Information Center said in a note.

 

The government sold 19,768 tonnes of corn from its reserves Tuesday, or 9.9 percent of the 200,598 tonnes it planned to sell.

 

The corn was sold at an average price of RMB1,550/tonne, up from RMB1,545/tonne last week.

 

US$1 = RMB1.4807 as of October 16, 2008