China will hold a rare second weekly corn auction on Friday to meet robust domestic demand from feed mills, after domestic futures rose to a record high this week and global prices gain on adverse weather events. The government will offer another 400,000 tonnes of corn from domestic stocks in the north-east and 600,000 tonnes in other provinces, similar to volume offered on Tuesday, according the official website of the National Grain and Oil Trade Centre (www.grainmarket.com.cn).
The central government on Tuesday reduced the volume offered in the north-east sharply to 400,000 tonnes from 1 million tonnes, sparking concern that government stocks may be running low as feed demand recovers, sending Dalian futures contracts to a fresh record high of more than 2,000 yuan a tonne. "The authorities have taken quick action to respond to the price rise. More sales could cool prices," said an industry analyst. Dalian corn prices eased on Wednesday. The most-traded January contract fell slightly to close at 1,989 yuan a tonne.
Beijing is eager to curb rising domestic food inflation, which has driven up the country's consumer price index (CPI) in July to a gain of 3.3 percent, above its year-target of 3.0 percent.
US, CHINA CORN CROPS Chinese feed mills are reluctant to book more corn imports amid expectations of a bumper domestic harvest if the north-east remains free of frost.
China, the world's second corn consumer, has already booked an unexpected 1.25 million tonnes of corn from the United States in 2010, the largest purchases in years. Global buyers have also accelerated purchases of US corn to fill a feed grain void as suppliers in the drought-scorched Black Sea region curtailed exports.
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