Corn supply is abundant and futures have limited room to rebound.

After a sharp decline in mid-to-late May, Dalian corn futures have stabilized since the beginning of June, maintaining a low-level oscillation trend. Looking forward to the future, domestic corn supply is still abundant, while demand is difficult to improve, coupled with the influx of imported corn and substitutes, corn futures have limited room to rebound.

The spot market is sluggish in peak season.

At this time in previous years, as the corn supply gradually entered a green period, the spot price of corn tended to go higher and higher. This year, the spot price of corn is relatively stable. According to monitoring, the current price of corn in Henan, the main producing area of Huang-Huai, is 2160-2200 yuan / ton, that of Hebei is 2200-2240 yuan / ton, and that of Shandong is 2310-2400 yuan / ton. The price of corn in the main producing areas of Northeast China is mostly between 2110 and 2300 yuan per ton, which has not changed much compared with the previous two months, but it has dropped by 150,200 yuan / ton compared with the same period last year. Corn demand side and traders learned from the lessons of last year, actively purchase when corn is concentrated on the market, maintain a large inventory, there is no danger of raw material shortage, so the seasonal rise has not been able to reappear.

The demand for corn is low.

Corn demand mainly includes feed demand and deep processing demand. In terms of feed demand, the pig industry is still in a period of contraction. According to a report released by the Ministry of Agriculture, the stock of live pigs in April was 387 million, down 9.4 percent from the same period last year, while the stock of fertile sows was 39.71 million, down 14.9 percent from the same period last year. The data of pig stock has been greatly reduced. Poultry is also not prosperous in the peak season, egg prices did not rise seasonally before and after the Dragon Boat Festival, and once fell below the 3 yuan / jin mark in some areas, affecting the enthusiasm of farmers to expand their stocks.

In the aspect of deep processing, due to the sluggish prices of downstream products, processing profits continue to hover in the negative area, the operating rate of corn deep processing enterprises is not high, and the support to corn prices is weak. At present, the profit of corn starch processing is still falling, and Shandong has fallen to-119 yuan / ton. The demand for corn starch is weak, while the prices of by-products such as protein powder and fiber continue to decline, the operating pressure of starch manufacturers is gradually increasing, and manufacturers in some areas begin to reduce the amount of processing to alleviate their own pressure.

An increase in the supply of adequate substitutes

From the production point of view, at present, corn cultivation has a stable income. Farmers have expanded the planting area of corn year after year and reduced the sown area of agricultural products such as soybeans and miscellaneous grains, which makes the domestic corn output increase year after year. International corn prices are steadily low, the gap between domestic and foreign corn prices is widening, and import profits are huge, which stimulate the increase of corn imports. According to customs statistics, China imported 403881 tons of corn in May, up from 140837 tons in April and an increase of 410.45 per cent over the same period last year. From January to May, China imported 1777619 tons of corn, an increase of 31.69 percent over the same period last year.

In addition, due to the absence of quota restrictions, imports of coarse grains such as sorghum, which can replace corn, have increased sharply. According to the latest USDA report, China's sorghum imports are expected to reach 9 million tons in 2015 and 2016, up more than 2000 times from 4000 tons in the market year 2010. Imported corn and miscellaneous grains occupy the demand space of domestic corn to a large extent, resulting in the upside down of the price of corn in the southern port of the selling area and that of the northern port of the producing area, thus suppressing the overall level of domestic corn price.

From a technical point of view, after three months of high oscillation, corn futures broke and fell in late May to announce the arrival of the corn bear market. The bulls' counterattack was also blocked at the neckline in early June, indicating that the downward trend is still the same. In operation, you can continue to go short against high.