October 20, 2011


China's corn prices ease on new-crop arrivals


Corn prices in China fell in the week to Wednesday (Oct 19) as new-crop arrivals eased supply tightness.


In major producing regions in the northeast, prices fell around 1% from a week earlier to RMB2,160-2,340 (US$338-367)/tonne.


In Shandong, a major consuming province, prices fell by around 2% to RMB2,320-2,360 (US$363-370)/tonne.


New-crop arrivals will likely pressure prices further in the near term, analysts said.


However, demand continues to be strong as hog raisers expand production amid soaring pork prices.


Hog inventories at end-September rose 1.3% from a month ago to 471.6 million head, marking the seven consecutive month of rising stocks, spurred by surging pork prices, the Ministry of Agriculture said.


In the first three quarters, China produced 35.68 million tonnes of pork, down 0.6% from a year earlier, the National Bureau of Statistics said.


Domestic pork prices have started to show signs of easing as supply rises, analysts said.


The hog-to-corn price ratio, an indicator of returns from hog production, was 7.85 as of October 12, down 0.5% from two weeks earlier, data from the National Development and Reform Commission showed.


But the data also showed hog-raising margins remain strong. A ratio of 6 is roughly the break-even level for hog farmers.

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