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Rotation Corn Reserves in Shanxi was Dealt Actively, but it Brings Limited Influence on Current Corn Market

China Agriculture Report By CnAgri2018-01-17 09:36:13China Agriculture Report Print On January 9th, the auction of rotation corn started in Shanxi, and planned auction volume of 26,710 MT all were dealt; on January 12th, auction volume was 32,215 MT, of which the transaction rate of first-class corn was 39% with a premium. The main reasons for an active transaction of rotation corn reserves in Shanxi are as the follows:    
First, due to a limited supply, grain-consuming companies are more willing to purchase; 
Second, the markets generally predicted corn prices would go up.
However, the auction of rotation corn reserves can’t cut down local corn prices and the influence on market is really on the psychological level. The main reasons are as the follows: 
First, the auction covers limited areas and the auction volume is relatively low;
Second, there is a time lag from transaction to grain-consuming companies.
Third, the auction all is dealt with a premium. With the addition of expenses such as warehouse-out, the costs are higher than the current market price. 
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