Temporary storage auction opens the downward trend of corn pressure

The fifth round of auctions of stored corn in Northeast China opened on Thursday. The auction is planned to be held in two days, with a total of 3.028 million tons of temporary stored corn. Since April 9, the news that the northeast temporary storage corn has been put on the market in bulk has continued to put pressure on the corn 1509 contract in recent months, and the starch has also followed the decline due to the decline in the price of corn raw materials, taking into account the discounted price pattern in the starch futures market. The price of starch futures has limited room to fall.

The price of corn in Northeast China is declining, and the auction affects the purchasing psychology of the market.

Since the temporary storage of corn was put on the market on April 9, the domestic spot price of corn has ended a strong rise. After the acquisition of corn in temporary storage turned to targeted sales, the spot prices of corn in many places in China fell steadily.

For the fifth round of temporary storage corn auction, which began on May 7, corn processing companies have responded calmly by taking the initiative to reduce the purchase price of corn. A person in charge of the enterprise said that the temporary storage corn auction implements the principle of selling at a favorable price, which will depress the mainstream sales price of corn spot market, and enterprises can appropriately adjust the purchase plan of corn raw materials according to the auction volume and price of temporary storage corn. At present, the corn purchase price range of Shandong corn processing enterprises is 2320, 2390 yuan / ton, while that of northeast corn processing enterprises is 2150, 2240 yuan / ton, down 30 yuan / ton from last week.

The operating rate of deep processing industry is low, and enterprises wait for price subsidies to be implemented.

Since the beginning of this year, domestic corn processing enterprises have been losing money. As of the beginning of this week, Jilin corn starch processing enterprises lost 16 yuan / ton, Shandong starch processing enterprises lost 84 yuan / ton, and Heilongjiang alcohol processing enterprises lost 500 yuan / ton. Corn deep processing enterprises have long-term losses, so that the operating rate of enterprises has been low, statistics show that the current operating rate of the domestic corn starch industry is 51%, the operating rate of the alcohol industry is 43%.

The grain subsidy for the 2015 corn auction of the State Reserve has been implemented since April 15. For the corn processing enterprises participating in the auction, as long as the processing scale and processing capacity meet the subsidy requirements, Heilongjiang and Jilin corn processing enterprises will receive price subsidies of 200 yuan / ton and 150 yuan / ton respectively, and they hope to alleviate the current situation of processing losses in the form of temporary corn price subsidies.

Starch futures price discount spot, futures price downside space is limited

With the introduction of the temporary storage corn selling policy at the end of March and the beginning of April, the domestic starch futures price also experienced the biggest drop since it was listed. By the close of trading on May 5, the price of starch futures had fallen to 3000 yuan / ton from a high of 3100 yuan / ton in early February, and the lowest starch price had reached 2900 yuan / ton in mid-April. In the process of the decline in starch futures prices, the pattern of starch futures discount in September has also gradually emerged.

If calculated according to the purchasing price of 2350 yuan / ton of corn raw materials in Shandong area, the cost price of processing one ton of starch by starch enterprises is 3180 yuan / ton. Based on the cost of 95 yuan per ton for Shandong starch spot, the lowest price for Shandong starch enterprises to enter the market for hedging is 3085 yuan / ton. At 1509 about 2990 yuan / ton, the discount spot is 90 yuan / ton. Therefore, when corn and starch are affected by the temporary storage and selling policy at the same time, the decline of starch futures will be less than that of corn, and the discount spot of starch futures will provide support for starch futures prices.