China Corn Prices Tread Water Amid Bearish Factors

China's domestic corn prices trended weakly in August, according to data from SunSirs. The average price of Grade 3 yellow corn was 2,250.00 RMB/ton on August 1 and 2,242.86 RMB/ton on August 31, marking a slight monthly decline of 0.32%. This weak trend can be attributed to the country's well-supplied corn market, where grain holders continued to release stocks for cash. As ports and deep-processing enterprises lowered their corn procurement prices, the continued arrival of low-priced imported corn substitutes exerted downward pressure on domestic corn prices.

The hog farming industry's continued losses also kept demand for feed corn sluggish. However, in mid-August, a surge in domestic corn futures prices caused a slight rise in corn procurement prices at ports and drove some deep-processing enterprises to raise their prices. This rally in the futures market halted the decline of domestic corn prices and allowed them to rebound slightly.

Despite this brief respite, SunSirs corn analysts believe that the domestic corn market faces multiple bearish factors, including high inventory levels, weak downstream demand for feed corn, cautious procurement by deep-processing enterprises, and plentiful supplies of corn substitutes. With the new season's corn set to enter the market in September, domestic corn prices are expected to continue fluctuating at low levels.