Along with the Changing Relation Between Supply and Demand, Turnover Rate of Temporarily-Stored Corn Auction Dropped Gre

By CnAgri2017-06-21 09:41:09 Print

Entering June, temporarily-stored corn auction showed the decreasing trend of transaction. Although weekly corn auction volume had decreased to 3.5 million MT from a high point of 5 million MT in the previous period, but the turnover rate still dropped greatly. Especially during June 15th-16th, the actual turnover was 1.3525 million MT and the turnover rate was 38.3%; both lowest since auction.

The main reasons are as the followings:

(1) The subsidy policy for further processing in the northeastern is about to expire and processing companies in Huang-Huai Region of north China have no profit, which cut down purchase volume for corn; along with no obvious growth in demand for corn from farming, feed companies are cautious about purchase;

(2)Some corn auctioned and concluded a transaction in the previous period has entered the distribution link, and imported substitutes such as sorghum and barley also arrive at the ports, which change the expectation of a tight supply of corn;

(3)Current temporarily-stored corn auctioned mainly is produced in 2013, with long storage time and restrictions of use in feed, which affects companies’ enthusiasm to participate in auction;

(4) Great difficulty in warehouse-out of corn that has been concluded a transaction also is one of reasons for a drop in transaction.