Corn starch futures hit new low amid weaker economy

Corn starch futures fell to the lowest level since October amid weaker domestic demand. The September Dalian corn starch futures contract fell nearly 2% and underperformed corn futures, further squeezing margins for industrial corn processors in China.

In the past two years, corn starch futures having typically traded at a premium between 300 to 600 yuan/ton to corn futures. In Monday’s trading, that spread fell to 365 yuan per ton, the lowest premium since December 2021.

Summer is usually a seasonally weaker period for industrial corn demand in China with many operators scheduling downtime and maintenance. Given that starch supplies are already reduced due to this downtime, it’s notable that the premium to corn has fallen.

September starch futures fell to an intraday low of 3,032 yuan/ton, a decline of 15.4% compared to their May peak.