Focus: Temporarily-Stored Corn Was Officially Auctioned on May 23rd, and Corn Market Prices Would Show the Increasing Trend

According to the news released by China National Grain and Oils Information Center on May 14^th, the auction would start on May 23^rd with the first weekly auction volume of 4 million MT. In the northeast and Inner Mongolia, the upset prices of grain produced in 2014 and 2015 would range at 1,550-1,650 RMB/MT and 1,600-1,700 RMB/MT. With the addition of warehouse-out and transportation costs, the prices would be 200 RMB/MT higher than last year.    
 
Sine May 10^th, China-U.S. trade war has heated up again, and both parties have raised the taxes, which means the imports of corn and cereals from the U.S. would suspend in a period of time. Influenced by that news, corn future prices begun to ascend greatly and spot market prices also showed the increasing trend. The starting of temporarily-stored corn auction can increase the supply of corn, stabilize market expectations and avoid exorbitant prices.
 
Meanwhile, temporarily-stored corn auction pricing brings support for corn market prices. According to the speculation on upset prices of corn (second-class) in Jilin, theoretical prices arrival at the ports range at 1,850-1,900 RMB/MT, almost the same as the current prices at the ports. Considering that temporarily-stored corn has been stored for a long time, it would bring certain premiums for new-season corn prices.     
 
Generally speaking, at the beginning of auctioning temporarily-stored corn, the transactions are relatively active, with a premium. So, the auction of temporarily-stored corn would push up corn spot prices in the domestic.