Why does the domestic corn market have a "sudden brake"?

I still remember that when the price of the domestic corn market continued to rise in November, we could not help but sigh whether the "spring" of corn had arrived ahead of schedule, but after entering December, this round of rising market suddenly showed a "sharp turn", and prices in most areas stopped rising and falling. In particular, the decline is most obvious in North China and Huanghuai producing areas, which rose rapidly before. We think that the domestic corn market is turning fast, that is, it is also reasonable. Below, the author will combine the relevant market information to make the following analysis, for reference only.

The price of domestic corn market has fallen.

First of all, from the perspective of northeast producing areas, due to the general strict inspection of the quality of temporary storage corn since December, the number of temporary storage acquisitions in the current period from December 1 to December 5 is significantly lower than that of the previous period, the pace of temporary storage acquisition slows down, and prices in northeast producing areas are slightly reduced, but because farmers in some areas are reluctant to sell and temporary storage support, the market price is more resilient. In addition, as prices fall, the profit margins of traders narrow, the enthusiasm for acquisitions decreases, traders operate cautiously, and the wait-and-see mood increases. Up to now, the purchase price of 14.5% water third-class corn of corn processing enterprises in Qinggang area of Heilongjiang Province is 1760 yuan / ton, down 10 yuan / ton from last weekend; the purchase price of Songyuan area of Jilin Province is 1920 yuan / ton, which is stable compared with last weekend; the purchase price of Shenyang area of Liaoning Province is 1960 yuan / ton, which is stable compared with last weekend; and the purchase price of Chifeng area of Inner Mongolia is 1920 yuan / ton, which is stable compared with last weekend. On the whole, the price in Northeast China is strong, and the price of corn with good quality is still on the strong side.

Secondly, from the perspective of the producing areas in North China, due to the improvement in the weather since December, the quantity of corn in North China has recovered rapidly, and the arrival volume of enterprises has increased, but the downstream demand has not been well carried out, and the market pattern has changed from a phased tight supply to a situation in which supply exceeds demand, and prices have also fallen reasonably in market expectations. Up to now, 14.5% water third-class corn of deep processing enterprises in Weifang, Shandong Province, costs 1900-1950 yuan / ton, down 40-50 yuan / ton compared with last weekend; Shijiazhuang, Hebei Province, 1740-1770 yuan / ton, which is basically the same as last weekend. Corn prices in North China have fallen 50-80 yuan / ton since Friday, and farmers will sell more grain in the short term, and corn prices will continue to be under pressure.

Finally, let's talk about the north-south ports. this week, the arrival volume of the northern ports has dropped, traders are cautious in purchasing, and corn prices have dropped slightly. So far, the mainstream price of corn purchased in Jinzhou Port is 2040-2045 yuan / ton, down 10-15 yuan / ton compared with last weekend. Guangdong port 15% moisture mildew less than 3% of the northeast corn arrival price is about 2180 yuan / ton, down 10-20 yuan / ton compared with last weekend The price of corn in Guangdong is lower, mainly because the purchasing mentality of Guangdong grain enterprises is not positive. Although the inventory of corn in Guangdong port is low, there is still sales pressure. In addition, the significant decline in corn prices in North China spread to Guangdong, pulling down corn prices.

The progress of corn acquisition in Northeast China has slowed down.

According to statistics, as of December 10, the cumulative purchase volume of corn stored in Northeast China was 31.9 million tons, including 5.14 million tons in Inner Mongolia (1.18 million tons in this period), 690000 tons in Liaoning (260000 tons in this period), and 6.86 million tons in Jilin. Heilongjiang accumulated 19.21 million tons (2.53 million tons). The cumulative purchase of corn for temporary storage in Northeast China on the 5th is 5.2 million tons, which is significantly lower than the highest level of 6 million tons in November (but higher than the level of 3 million tons in the previous period). Market analysis believes that there are two main reasons for this fluctuation: first, the purchase standard of corn for temporary storage is more stringent, and some grain merchants are unable to enter the temporary storage. Second, the heavy snow in Northeast China this week is not conducive to the listing of corn, coupled with some farmers are more reluctant to sell, the number of new grain on the market has decreased. In addition, according to corn processing enterprises in Jilin Province, the purchase volume of corn has declined in the past two days, and the purchase volume of enterprises with too low inventory has not increased significantly after raising the purchase price. among them, the purchase volume of large-scale corn processing enterprises in Siping area of Jilin Province dropped from more than 5000 tons on the 8th to more than 3000 tons on the 9th. The decline in purchase volume is mainly due to the decrease in grain sales by farmers, on the one hand, there is a certain psychology of being reluctant to sell, and on the other hand, a wide range of snow has fallen in Jilin Province in the past two days, which has affected farmers' grain sales and logistics.

Selling rumors have an impact on market psychology

In the past two days, the news about the selling of empty corn in stored grain has been introduced into the market. The news shows that the sale of old grain is about to start recently, and about 3 million tons of old grain stored for the longest time in 2012 will be targeted to be sold to deep processing enterprises. The selling price is 500 yuan / ton lower than the purchase price of temporary storage this year. In addition, the old grain in 2013 is also faced with the possibility of price reduction to the market, thus reducing the pressure of huge inventory. in fact, as soon as the news comes out, it does have an impact on the market, which is also a factor leading to the recent price decline in Dalian corn futures. The main 1609 contract fell 25 points to 1738 yuan / ton, resulting in fluctuations in the spot market psychology. And the resulting speculation about the late state policy and whether the country can have a sustained selling behavior still has an impact on the market trend, but with the support of temporary storage and acquisition, the probability of a sharp fall in corn prices is also small. According to the survey data of some institutions, the progress of grain sales by farmers in Liaoning and Jilin areas is different, and at present, the overall progress is relatively slow. As of the end of November, the progress of grain sales by farmers in Liaoning is relatively fast, at 40%, 50%, and less than 20% in Jilin area as a whole. The overall progress of grain sales in Heilongjiang is relatively fast, more than 30%. For North China, the peak period of grain sales is from December to January of the following year, and with a large number of dry grain on the market, market prices will face downward adjustment again in the future.

Domestic corn output hit a record high

According to the 2015 grain output announcement issued by the National Bureau of Statistics, the data show that the sown area of grain in 2015 was 113340.5 thousand hectares, an increase of 617.9 thousand hectares, or 0.5%, over 2014; the national grain output per unit area was 5482.9 kg / ha, an increase of 97.8 kg / ha over 2014, an increase of 1.8%; and the total national grain output was 621.435 million tons, an increase of 14.408 million tons over 2014. The increase was 2.4%. Of these, the sown area of corn in 2015 was 38116.6 thousand hectares, an increase of 1040.5 thousand hectares, or 2.8 percent, over the previous year; the per unit yield was 5891.9 kg per hectare, an increase of 74.9 kilograms per hectare over the previous year, or 1.3 percent; and the total national corn output reached 224.58 million tons, an increase of 8.91 million tons over the previous year, an increase of 4.1 percent. Domestic corn output is at a record high.

On the whole, the recent decline in domestic corn prices seems to be the inevitable result of the operation of the market, although with the Spring Festival approaching, enterprise stock will open or boost the market to a certain extent, however, there is still a certain risk that the price of corn in Northeast and North China exceeds 2000 yuan / ton. In the short term, the impact of rain and snow weather and policy rumors on the market remains the same, while the lack of market demand, the decline in corn prices is difficult to change, the future still need to pay close attention to the acquisition progress of temporary reserves and whether the relevant policy rumors can be confirmed.

Selling rumors have an impact on market psychology

In the past two days, the news about the selling of empty corn in stored grain has been introduced into the market. The news shows that the sale of old grain is about to start recently, and about 3 million tons of old grain stored for the longest time in 2012 will be targeted to be sold to deep processing enterprises. The selling price is 500 yuan / ton lower than the purchase price of temporary storage this year. In addition, the old grain in 2013 is also faced with the possibility of price reduction to the market, thus reducing the pressure of huge inventory. in fact, as soon as the news comes out, it does have an impact on the market, which is also a factor leading to the recent price decline in Dalian corn futures. The main 1609 contract fell 25 points to 1738 yuan / ton, resulting in fluctuations in the spot market psychology. And the resulting speculation about the late state policy and whether the country can have a sustained selling behavior still has an impact on the market trend, but with the support of temporary storage and acquisition, the probability of a sharp fall in corn prices is also small. According to the survey data of some institutions, the progress of grain sales by farmers in Liaoning and Jilin areas is different, and at present, the overall progress is relatively slow. As of the end of November, the progress of grain sales by farmers in Liaoning is relatively fast, at 40%, 50%, and less than 20% in Jilin area as a whole. The overall progress of grain sales in Heilongjiang is relatively fast, more than 30%. For North China, the peak period of grain sales is from December to January of the following year, and with a large number of dry grain on the market, market prices will face downward adjustment again in the future.

Domestic corn output hit a record high

According to the 2015 grain output announcement issued by the National Bureau of Statistics, the data show that the sown area of grain in 2015 was 113340.5 thousand hectares, an increase of 617.9 thousand hectares, or 0.5%, over 2014; the national grain output per unit area was 5482.9 kg / ha, an increase of 97.8 kg / ha over 2014, an increase of 1.8%; and the total national grain output was 621.435 million tons, an increase of 14.408 million tons over 2014. The increase was 2.4%. Of these, the sown area of corn in 2015 was 38116.6 thousand hectares, an increase of 1040.5 thousand hectares, or 2.8 percent, over the previous year; the per unit yield was 5891.9 kg per hectare, an increase of 74.9 kilograms per hectare over the previous year, or 1.3 percent; and the total national corn output reached 224.58 million tons, an increase of 8.91 million tons over the previous year, an increase of 4.1 percent. Domestic corn output is at a record high.

On the whole, the recent decline in domestic corn prices seems to be the inevitable result of the operation of the market, although with the Spring Festival approaching, enterprise stock will open or boost the market to a certain extent, however, there is still a certain risk that the price of corn in Northeast and North China exceeds 2000 yuan / ton. In the short term, the impact of rain and snow weather and policy rumors on the market remains the same, while the lack of market demand, the decline in corn prices is difficult to change, the future still need to pay close attention to the acquisition progress of temporary reserves and whether the relevant policy rumors can be confirmed.