Policy Grain Transaction Volume Shrank with Divergent Transaction Rates in May 2026

June 4, 2026, 2:54 PM

LYDD-Global

Guide

Highlights at a glance

In May 2026, China's grain market faced bearish pressure as trader inventories rose ahead of the new wheat harvest, while hog farming losses and reduced deep-processing activity weakened feed grain demand. Spot grain prices dipped 0.25% MoM. State reserve corn sales declined with a 31.45% transaction rate, but procurement surged to 95.05%. Sprouting wheat in Hubei and Henan entered markets, substituting corn use. The first auction of 1 million tons of aged Heilongjiang rice saw low uptake, limiting immediate impact on corn. Market focus shifts to future rice auction terms and their potential substitution effect on corn demand.

In May 2026, surplus grain in major domestic grain-producing regions was fully transferred to grain traders, pushing up traders’ inventory on a year-on-year basis. Ahead of the new wheat harvest in North China, traders actively cleared warehouse space for outgoing shipments, lifting grain inventories at ports to relatively high levels and resulting in temporarily ample market supply. Meanwhile, hog farming stayed in the red, dragging down feed grain demand. Deep-processing enterprises cut operating rates amid shrinking profit margins and scheduled equipment maintenance, leaving insufficient fundamental demand to prop up spot grain prices. Driven by bearish demand fundamentals, domestic spot grain average price edged down by 0.25% month on month.

China’s state grain reserve auctions saw further contraction in total corn offering volume and a mild month-on-month drop in overall sales transaction rate in May 2026; by contrast, contracted corn purchasing volume fell notably alongside a sharp rise in procurement transaction rate.

Statistical Breakdown of State Reserve Corn Auction Deals (May 1–31, 2026, via Sinograin Online Trading Platform)

Competitive Sale of Reserve Corn

A total of 43 auction sessions were held; planned sales volume stood at 392,185 metric tons, with actual traded volume of 123,332 metric tons and a transaction rate of 31.45%.
Competitive Procurement of Reserve Corn

52 procurement auction sessions were completed; planned procurement volume reached 1,552,283 metric tons, actual finalized purchases hit 1,475,401 metric tons at a transaction rate of 95.05%.
Dual-Way Buy-and-Sell Competitive Bidding for Corn

48 dual-purpose bidding events were conducted; total planned transaction volume was 1,172,888 metric tons, and actual traded volume registered 840,932 metric tons, corresponding to a 71.70% transaction rate.
One-Off Reserve Corn Sales & Procurement

Zero auction sessions were arranged for one-off reserve corn sales and one-off reserve corn procurement respectively, with zero planned volume, zero traded volume and 0% transaction rate for both categories.
Imported Corn Competitive Sales

No imported corn competitive sale auctions were launched in the month; planned volume, traded volume and transaction rate all stood at zero.

Domestic Crop Progress & Extra Grain Market Influencing Factors

Latest crop monitoring data released by the Ministry of Agriculture and Rural Affairs indicated over 80% of national spring grain sowing had been finished, outpacing the same period of last year marginally by year-on-year comparison.

Breakdown by crop variety: spring corn sowing completion exceeded 90%, mid-season rice transplanting surpassed 50%, and spring soybean planting finished more than 60%. Spring sowing across Northeast China wrapped up over 80% of total acreage, ahead of the prior-year level. Major national wheat-producing regions entered the critical harvest window sequentially: wheat harvest in Southwest China wrapped up over 80% of output, while large-scale wheat harvesting was poised to kick off across Huanghuai Plain.

Sustained rainfall throughout May triggered relatively prominent sprouting wheat in partial areas of Hubei and Henan Provinces. Such sprouted wheat entered the commodity grain market gradually, substituting partial corn consumption and further curbing feed mill procurement appetite.

In addition, the first batch of 1 million metric tons of aged Heilongjiang rice was put up for auction on May 29 at a base price of RMB 1,500 per metric ton. Only 634,000 metric tons was successfully transacted with a high unsold rate and an average premium of RMB 7 per metric ton. Calculated against the base price of Grade 2 brown rice, the traded rice held limited cost competitiveness, imposing limited substantive bearish pressure on corn market in the short run.

Market participants need to keep track of future adjustments to the base auction price, transaction rate and premium level of rice auctions, which will generate substitution pressure on the corn market.

Global Soybean Market Poised to Enter Inventory-Building Cycle

Ended