Under the pressure of storage and discharge, the price of corn is getting lower and lower.

Recently, the Ministry of Agriculture held a forum on agricultural structure adjustment in the four northeastern provinces in Changchun City, Jilin Province, specifically requiring the four northeastern provinces to reduce the planting area of corn. The author believes that since 2008, the bull market feast of rising corn production and prices caused by temporary storage acquisitions will come to an end. In terms of trend, corn prices will have a long way to go, at least until the government deals with the current large amount of temporary stocks. However, the possibility of corn price fluctuation caused by the sharp decrease in yield and other factors can not be ruled out.

From the important speeches made by Minister of Agriculture Han Changfu, we can clearly see the changing process of the government's attitude towards corn production and import.

In 2010 and 2011, due to the tight domestic corn supply and soaring prices, China was forced to import 5.23 million tons of corn from the international market in 2011 to replenish its inventory, that is, the imported corn later auctioned in the customs. In 2012, Minister Han published a long article on Corn in People's Daily to explain the important position and role of increasing corn production capacity.

In 2013-2014 and 2014-2015, the state purchased 69.19 million tons of corn and 83.29 million tons of corn respectively in four provinces in Northeast China for two consecutive years. Corn prices fluctuated sharply, feed enterprises and corn processing enterprises bear huge market risks, and the central finance is also overwhelmed. In June this year, Minister Han held a forum on agricultural structure adjustment in the four provinces and regions of Northeast China, pointing out that the focus of the adjustment of corn planting structure is the northeast region, and the four provinces and regions in Northeast China will reduce the planting area of corn next year.

It must be admitted that the corn temporary storage and acquisition policy has indeed played an important role in increasing farmers' income and corn production capacity. Since the implementation of corn temporary storage and acquisition in 2008, the total domestic corn production has increased from 166 million tons to a peak of 218 million tons in 2013, with an increase of 31.7% and an increase of 24% in acreage.

It is reported that among the several government departments involved in the corn temporary storage and acquisition policy, the Ministry of Agriculture and the provincial and regional governments of Northeast China opposed the price reduction acquisition from the point of view of protecting farmers' income, while the Ministry of Finance and other departments hoped to buy temporary storage corn at a lower price from the perspective of saving government expenditure. Minister Han's speech on June 28 meant that the Ministry of Agriculture had changed its mind, that is, government agencies at the central level had unified their thinking, and the reduction in the purchase price of new temporary corn reserves in the autumn was almost a foregone conclusion.

For corn and even corn starch futures and spot, temporary purchase price adjustment is hanging over the sword of Damocles. Considering the working procedure of the temporary reserve purchase price and the release time of last year and the year before last, it is expected that the final dust will not be settled until late November. Prior to this, corn and even corn starch futures prices have been under pressure, it is difficult to rise effectively, there will only be a partial rebound.

At present, it is rumored that there are multiple versions of price reduction of 200 yuan / ton, 120 yuan / ton (as low as 2012 level) and 100 yuan / ton. From the information that the author has, it is logically inferred that the price drop should be less than 100 yuan per ton, mainly because the minimum protection price of wheat and rice has not been reduced last year, and the temporary storage and purchase price of corn will not drop very much.

The author believes that this autumn temporary storage acquisition method has the following changes: first, the price reduction is less than 100 yuan / ton; second, improve the quality standard, it is expected that moldy corn will be excluded from temporary storage acquisition, this can refer to the 2015 wheat minimum protection price acquisition only 2015 production of national standard third-class wheat; third, the temporary storage purchase volume is distributed in batches, which can refer to 2008 and 2009 corn temporary storage acquisition in four batches.

At the same time, the author also believes that the Chinese government will not let corn become the next soybean, that is, the government will prevent the import of low-cost corn from impacting domestic production capacity. Therefore, the dual control measures of corn import quota and GM policy will exist for a long time. This also means that the price difference at home and abroad will not narrow in the short term, and a large number of substitutes and related products of corn and corn starch such as sorghum, barley, cassava, cassava starch and DDGS will be imported for a long time, as long as the market is profitable enough.