Low corn price and surplus is seriously beneficial to downstream industries such as sucrose.

China Securities Network News (trainee reporter Jin Jiajie) Since the second quarter of this year, corn prices have fallen into bear market all the way. After the afternoon opening, corn futures main contract 1605 decline continued to expand, the price fell below 1800 yuan/ton, the contract compared with March this year when the highest price of 2500 yuan/ton has fallen nearly 30%. International agricultural prices are also at a low point, with U.S. CBOT corn prices down 0.26% as of press time, down 17% from their peak in July this year.

Similar agricultural products of corn have also weakened recently. In the morning, the main contract of soybean meal 1601 fell by 1.41%, and the main contract of rapeseed meal 1601 also fell by 0.72%. Corn prices have also fallen downstream eggs, which have fallen by more than a quarter in some areas recently compared with July, with the main egg contract 1601 down 0.52% at midday today.

In September this year, the national corn temporary reserve listing purchase price dropped from 1.12 yuan/catty last year to 1 yuan/catty, the first time in seven years. There is a serious oversupply of corn in the market, and warehouse stocks are much higher than expected.

The reporter learned through relevant grain experts that this year's temporary storage stocks may reach more than 50 million tons. According to the estimated quantity of temporary storage and auction sales, the balance of temporary storage acquisition is as much as 150 million tons. If this year continues, the acquisition quantity will increase; while the domestic consumption is less than 200 million tons, so the annual balance is about 50 million tons.

Close to November temporary reserve opening, northeast corn a large number of listed, but inventory digestion is not smooth. On October 22, more than 1 million tons of corn in the National Temporary Reserve Corn Bidding and Sales Fair were sold, and the inventory was overstocked.

However, corn weakness is good news for other corn deep processing industries such as sugar. Industry insiders said that 55% of corn starch in the market is currently used to produce starch sugar, and falling corn prices will reduce fructose costs, improve industry profit margins and promote fructose downstream consumption.

Guotai Jun 'an futures researcher believes that due to the fall in corn starch prices, the price difference between white sugar and starch sugar continues to widen, starch sugar has substitution advantages, in addition, the decline in starch prices makes domestic starch gradually have export price advantages, which may boost starch demand.

Relevant experts pointed out that the deep drop in corn prices will help to improve the operating rate of corn deep-processing starch enterprises, but more attention should be paid to the market for its downstream products. China's starch production capacity is surplus, this year's deep processing industry losses are serious, so the key depends on whether exports can improve profits or find product innovation. Starch, as an intermediate product, will also flow into the commodity market in the form of other products.

In the pattern of corn oversupply, downstream fuel ethanol and other deep processing industries may become a new way to consume stocks. Some futures analysts pointed out that rebuilding corn ethanol plants will help consume aged corn stocks, increase cleaner ethanol production, and also help reduce pollution.