Temporarily-Stored Auctions Pushed Down Corn Prices, and Northeastern Further Processing Companies Gained High Profits

By CnAgri2018-06-08 14:48:48 Print Since the first auction of temporarily-stored corn on April 12^th, there has been a high auction volume of 7 million MT/week, and since May, the auction volume has increased to 8 million MT/week. By May 11^th, the auction volume of temporarily-stored corn had approached to 27 million MT. Though warehouse-out time lagged, yet dealt corn could efficiently relieve the demand pressure, and more importantly, it brought relatively great influence on markets. 
 
The current average price of corn is RMB1,840/MT, RMB 70/MT less than that before the auctions. Of which the decline in the northeast was biggest, nearly RMB 100/MT; RMB 30/MT in north China and Huang-Huai Region; RMB 70/MT at the ports of consumption areas. It was predicted that corn market prices would continue to go down along with the warehousing out of corn auctioned in large quantities. 
 
Corn starch and alcohol prices both went down, but the decline in corn costs was bigger. Theoretical alcohol processing profits from corn auctioned in some areas are upward of RMB 400/MT, and theoretical processing margins of corn starch in the northeast are around RMB 160/MT, both returning to a relatively good level.