New crop could push corn prices lower in China

Corn prices in China could remain relatively stable in the first half of September, but downward pressure is expected to increase in the second half of the month as the new crop enters the market in larger volumes. Supply growth is expected to be particularly noticeable in North China, where the corn harvest is set to peak toward the end of September.

At the end of August, the average corn price in China stood at around CNY 2,240/t, down about CNY 10/t from the beginning of the month. The market remained relatively weak in August, with traders reducing old-crop stocks while feed mills and processors largely purchased raw materials only to cover immediate needs.

In September, increasing supplies of new-crop corn could intensify competition and encourage holders of old-crop stocks to accelerate sales. Weak demand is adding further pressure, as major feed producers are reluctant to build inventories, while deep-processing companies remain cautious about purchases due to limited margins.

Corn demand is also being constrained by the availability of alternative feed grains. Wheat, rice and sorghum remain price-competitive and are partially replacing corn in feed production. At the same time, the good quality of the new crop could further reduce the attractiveness of old-crop stocks.

Analysts expect corn prices in some markets to decline by CNY 20–40/t in September. The monthly average is forecast at around CNY 2,225/t, with prices generally ranging between CNY 2,200 and 2,240/t. Further price movements will depend primarily on the pace of new-crop arrivals and crop quality.

Tags: China, corn, prices