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A Continuous Growth in Corn Prices is Not Good for Planting Structure Adjustment in the Northeast

China Agriculture Report By CnAgri2018-02-08 14:17:18China Agriculture Report Print Along with the continuing of market-oriented purchase + subsidy policy for corn, a reduction in corn planting areas in non-dominant producing areas such as “Sickle-Shaped Region” and the improvement of soybean planting margins, 2017 corn planting areas decreased 3.6% to 35.45 million ha, and corn output was down 3.66 million MT to 215.89 million MT. 
However, along with the change in predication of an oversupply resulting from a reduction in output, the farmers were less willing to sell and the traders and further processing companies all raised their purchase prices, which pushed up the growth of new-season corn in 2017. By the first week of 2018, the average price of corn had ascended RMB 1,700/MT in the northeast and RMB 1,850/MT in north China and Huang-Huai Region, up 21% or RMB 300/MT and 8% or RMB 130/MT from that in the same period of last year. Along with corn prices keeping increasing, planting margins improved greatly. 
2017 soybean target prices in the northeast maintained RMB 4,800/MT, and with the addition of subsidies, farmers’ incomes averaged at RMB 4,500/MT. At the current cont price, there is no big difference on planting margins between corn and soybean. Along with corn prices keeping increasing, corn planting margins possibly would be higher than soybean.
It means the situation of a drop in corn planting areas possibly will be reversed and even fall in the spring-sowing time of 2018.
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