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December Corn Prices Would See a Limited Growth

China Agriculture Report By CnAgri2017-12-22 11:01:05China Agriculture Report Print After new-season corn availability on the market, corn prices didn’t see a seasonal fall. Especially entering December, corn prices in the producing and consumption areas increased by RMB 10-30 RMB/MT compared with early December. But, corn prices still would see a limited growth in December. The main reasons are as follows: 
(1) Corn is available on the market in large quantities. Along with decreasing temperature and increasing corn that can be available in the northeast and north China and Huang-Huai Region, corn availability increased obviously compared to the previous period, and grass-root farmers still have lots of corn that has not been sold. Considering that some farmers have the demand of cash and loan refunding before the Chinese New Year, a peak of selling grain possibly would take place before the Chinese New Year, which would increase pressure on a drop in corn prices.   
(2) Further processing companies’ profits dropped. Due to high profits in previous period, further processing companies compete to raise prices for grain. Starch companies maintain their operating rates at a high level of more 80%, but downstream starch sectors such as starch sugar, pharmacy, alcohol and paper-making are influenced greatly by environmental policy, so starch companies’ stocks are gradually rebounding. An increase in stocks and high corn prices would dampen starch companies’ willingness to purchase corn.    
(3) The demand for feed is less than the expectation. Influenced by environmental policy, livestock/poultry farming shows the decreasing trend, feed consumption growth is limited, and a continuous growth in corn prices curbs feed companies’ willingness to purchase, which curb an growth in corn prices. 

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