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Why Were Rotation Corn Reserves in Shanxi Dealt Actively?

China Agriculture Report By CnAgri2018-02-08 14:29:31China Agriculture Report Print On January 9th, the auction of rotation corn in Shanxi started, and planned auction volume of 26,719 MT all were dealt, with a premium of RMB 7-85. on January 12th, auction volume was 32,215 MT, of which the transaction rate of first-class corn was 39% with an average transaction price of RMB 1,858/MT and a premium of RMB 6/MT. With the addition of expenses such as warehouse-out and transportation, rotation corn prices are higher than the current market price. The main reasons for an active transaction of rotation corn reserves in Shanxi are as the follows:  
First, due to a limited supply of corn, grain-consuming companies are more willing to purchase. Influenced by rainy and snowy weather in north China in early January, the transportation is poor; grass-root farmers are less willing to sell and the traders most stock up the goods; corn arrives in small quantities, so further processing and feed companies are more willing to raise the prices.
Second, the markets generally predicted corn prices would go up. The progress of corn sales have been obviously quicker than last year: grass-root grain surplus in north China and northeast China is less 40% and around 30% respectively. Especially this year, the traders most stock up the good and are optimistic about price growth. Considering that market prices are still increasing when corn is warehoused out, most grain-consuming companies lock corn use-costs with the price a bit higher than the current market. 
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