State purchases support corn prices in China, but a sharp rally is unlikely

China’s corn market is being influenced by two opposing factors: rising supplies of new-crop grain and government reserve purchases. Following the October holidays, state-owned Sinograin began purchasing corn in northeastern producing regions, offering around 2,100 yuan/t for third-grade grain with 14% moisture. These measures are primarily aimed at stabilizing the domestic market and supporting a price floor rather than stimulating price increases.

According to Mysteel, Sinograin’s purchase prices are 20–110 yuan/t higher than those offered by processing enterprises in Heilongjiang province. However, they remain below trader and port prices. Since the arrival of the new crop, state purchases have exceeded 4.4 mln tons. This has supported futures quotations and helped stabilize port prices, although excess supply continues to weigh on the domestic market.

As of October 15, the average corn price in China stood at 2,194 yuan/t, down 41 yuan/t, or 1.83%, week-on-week. Increasing new-crop supplies are forcing processing enterprises to lower purchase prices amid limited profitability. Price pressure is particularly noticeable in northeastern regions, where the rapid arrival of newly harvested corn is boosting market supply.

Meanwhile, some Chinese farmers are beginning to hold back grain sales following a prolonged decline in prices. This is limiting the potential for further price decreases, although conditions are not yet favorable for a significant rebound. According to analysts, the market will remain under pressure from seasonal supply growth in the second half of October, with prices fluctuating near low levels.

From November onward, the situation may gradually stabilize as the peak of new-crop sales passes. Slower farmer selling, continued government purchases, and recovering demand from processors are expected to support a moderate price increase. However, Mysteel does not expect a sharp rally in corn prices, with further movements depending on Sinograin’s procurement volumes and the pace of grain sales by farmers.

Tags: corn, prices, China