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High-Quality Corn Prices Won’t Fall Seasonally in the Near Future

China Agriculture Report By CnAgri2017-11-23 17:00:12China Agriculture Report Print Since new-season corn availability on the market, corn prices in the producing and consumption areas have been stable with some fluctuations and have not seen a yearly seasonal decline. Corn prices during November 13th-17th averaged RMB 1,750/MT, only RMB 15/MT less than that in late September (before new corn availability on the market). It was predicted high-quality corn prices still possibly would ascend in the near future.
First, compared to the situations of serious oversupply and a net increase in stocks in 2016/17, the relation between supply and demand in 2017/18 would be changed. Due to a reduction in corn planting areas, 2017/18 corn output was expected to decrease 11 million MT to 210 million MT, however the demand for corn would reach 221 million MT. It is the first time that corn output is less than the demand, and corn stocks would see a net reduction. 
Second, the policy still plays a vital role to corn market prices. The loan funds of 200 billion RMB for purchasing autumn grain from the Agricultural Development Bank are all in place, of which corn purchase is planned to be 50 million MT. Recently, the National Development and Reform Commission, the Bureau of Grain and the Ministry of Finance issued emergency notice on the problem of difficulty on purchasing grain with poor quality. China Grain Reserves Cooperation said at least 4 million MT of grain would be purchased for rotation in December in order to stabilize market prices.
Third, high-quality corn would be in a tight supply in the near future. More overcast and rainy weather in north China and Huang-Huai Region during the period of new-season corn availability on the market led to a slow drop in water content in water and a relatively high mildew rate. It also means high-quality corn for feed would be in a tight supply, and the markets mainly would depend on northeast supply, further pushing up high-quality corn market prices.

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