An analysis of recent trends and fluctuations in the domestic corn market reveals that its price formation is influenced by a combination of commercial, policy, and political factors. Increased releases of policy grains from June to August this year may accelerate the pace of inventory drawdowns by trading firms in production areas, creating expectations of rising market supply. Coupled with weak downstream demand, national corn prices are anticipated to enter a downward trajectory.
Policy as a Determinant of Corn Pricing
Examining the recent operational trends and volatility characteristics of corn prices shows that domestic price formation incorporates commercial, policy, and political attributes. Corn pricing holds significant representativeness within the agricultural sector, offering substantial scope for study. The policy attribute is primarily manifested through the release of policy grains, which takes specific forms such as imported corn auctions, aged rice auctions, corn bidding sales, and minimum purchase price wheat auctions. The primary objective of these policy grain releases is to stabilize prices and ensure supply, constituting a vital component of China's food security strategy.
In the first half of 2025, national corn prices exhibited overall strength. Monitoring data indicates the national average corn price rose from 2,025 yuan per tonne to 2,340 yuan per tonne, a gain of nearly 16%. This increase elevated cost pressures for downstream processing enterprises, squeezed profits, and weakened corn demand. Entering July, imported corn auctions commenced, with the frequency adjusted from once weekly to twice weekly, a pattern sustained through year-end. The continuous market supply supplementation from these imported corn auctions helped alleviate cost pressures for downstream deep-processing and feed enterprises to some extent. However, with demand for the new crop season constrained, this exerted downward pressure on corn prices. The most direct manifestation in production areas was a strong bearish sentiment among trading firms, leading to increased willingness to sell inventories, a rise in market supply, and a subsequent decline in corn prices from their highs. In July and August, prior to the concentrated market arrival of the new season's corn, the national average price fell to a low of 2,315 yuan per tonne, representing a 1.11% drop from the June peak.
Judging by the auction results for imported corn, the inaugural session achieved a high成交rate of 97%, with an average premium of 125 yuan per tonne, indicating strong participation from downstream enterprises. As domestic corn prices declined, the成交rate for imported corn auctions noticeably fell from the latter half of July through the end of August, reaching a low of 8%. With the new season corn gradually coming to market in September, and a supply gap in North China production areas in October, prices for Northeast corn continued to rise through November and December. Comparatively, imported corn holds certain advantages in quality indicators such as moisture content. Consequently, the成交rate for imported corn auctions climbed steadily, with multiple sessions achieving full clearance. This demonstrates that imported corn auctions, while supplementing market supply, also alleviate procurement and cost pressures for downstream enterprises. Based on公开data, imported corn auctions from July to December 2025 totaled approximately 10.04 million tonnes, with an average成交rate of 54%.
Diversified Policy Grain Releases Increase in 2026
Entering 2026, the forms of policy grain releases diversified, including minimum purchase price wheat, aged rice, and imported corn. Looking at specific auction outcomes, two sessions on June 5th and 9th released a total of 358,000 tonnes of imported corn, achieving an average成交rate of 93% and an average premium of 60 yuan per tonne, reflecting high market participation. Aged rice auctions on May 29th and June 11th released 2 million tonnes, with an average成交rate of 63%, a floor price of 1,500 yuan per tonne, and an average premium of 10 yuan per tonne. The成交rate fell below market expectations primarily due to increased availability of new season sprouted wheat.
Market feedback indicates that following increased supply of new season sprouted wheat in parts of Central and North China in late May and the confirmation of aged rice auction news, bearish sentiment intensified among trading firms in production areas, leading to increased grain sales. However, downstream processing industries primarily focused on essential demand, causing the supply-demand balance to loosen. Consequently, the national average price continued to decline, falling from 2,310 yuan per tonne to 2,298 yuan per tonne, a drop of 0.54%. Despite the falling corn prices, cost pressures remained difficult to alleviate for downstream deep-processing enterprises, feed producers, and terminal breeding operations. Some deep-processing plants underwent maintenance, and small-scale pig farmers temporarily exited the market, creating a negative cycle of high raw corn costs, shrinking corporate profits, reduced operating rates, and farmer exits. Entering June, imported corn continued to supplement market supply to help mitigate cost pressures in downstream sectors.
From a market price perspective, the national average corn price in early June fell from 2,297 yuan per tonne to 2,293 yuan per tonne before experiencing a slight rebound. The旬average settled at 2,295 yuan per tonne, slightly down by 10 yuan per tonne compared to late May. This was mainly because inventory build-up costs for trading intermediaries in production areas remained high. Selling grain at current market prices would deepen losses, leading some trading firms to adopt a price-supporting, hold-back-sales sentiment.
Policy Grain Releases: A Key Factor for June-August Corn Price Movements
Currently, regarding raw material choices for downstream enterprises, feed companies have options like new season wheat (sprouted wheat), aged rice, imported corn, and imported substitutes. Some deep-processing enterprises can opt for new season wheat. This will constrain corn demand and also exert downward pressure on corn prices. Feed corn still faces essential demand in certain poultry and piglet feed formulations, which may provide some support for corn prices.
Given the current context of sustained policy grain releases, increased availability of substitutes, and a year-on-year rise in corn inventories in production areas, the inventory drawdown sentiment among trading firms in these areas will directly impact effective market supply. Entering July and August, as high-temperature weather increases, trading firms in production areas with poor storage conditions or financial pressures will be forced to sell inventories. Market supply still has room to increase, while downstream demand seasonally weakens. It is anticipated that the national average corn price may trend weaker.
National policy carries an element of unpredictability. Market participants are advised to closely monitor the release frequency of policy grains, auction成交results, and the participation level of downstream enterprises.
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