Corn market may continue "strange phenomenon": a large number of flow to collection and storage enterprises

The trend of the corn market in 2014 has a textbook demonstration significance for 2015, and has a great impact on the procurement mode and inventory strategy of market farmers, trading enterprises and grain enterprises in 2015.

In 2014, the domestic corn market fluctuated violently, showing a situation of "record overproduction, record acquisition of temporary reserves, and record price rise". Under the expectation of increasing production, the inventory in the market is greatly reduced, and the oversupply in the domestic corn market leads to the purchase of storage capacity, and the corn market presents the "three changes" characteristics of "inventory structure change, trade pattern change, pricing mechanism change".

The acquisition of temporary storage may repeat last year's "madness".

In 2014, the country's total grain output again exceeded 600 million tons, of which corn output reached 215.673 million tons, the second highest in history. In the case of slowing demand and output at historical highs for years, the domestic corn market shows a pattern of oversupply and weak demand, which obviously exceeds demand, resulting in a large number of corn entering the national temporary reserve.

According to the estimation of the National Grain and Oil Information Center, the surplus supply of corn in China has exceeded 20 million tons in the past three years. The annual balance reached 24.89 million tons in 2013 and 39.76 million tons in 2014.

The balance of supply and demand for the whole year of 2015 is also expected to be 29.5 million tons.

Under this new normal that supply exceeds demand, in order to protect farmers' interests and enthusiasm for growing grain and promote grain production, the state has openly purchased temporary stored corn in four provinces and regions in Northeast China. As of February 28, 2015, the total amount of temporary reserves and acquisitions of the four provinces in Northeast China has reached 59.59 million tons, 11.1 million tons higher than that of the same period last year.

From the point of view of the progress of acquisition, the acquisition of temporary reserves in Northeast China accelerated significantly in January, with a monthly purchase volume of 33.7 million tons; in the first and middle of February, the acquisition volume also reached 13.45 million tons from February 1 to 15; and in late February, affected by the Spring Festival holiday, the acquisition of temporary reserves basically stalled.

Judging from the surplus grain of farmers in Northeast China, it is estimated that after the Spring Festival, the surplus of commodity corn of farmers in Northeast China is about 15 million tons, while traders store about 7 million tons of grain. The storage of grain in the market is limited, and there is limited room for temporary storage and acquisition to continue to increase substantially. At present, the inventory level of grain enterprises in Northeast China is about 1-1.5 months, and the inventory plus forward contracts of some enterprises are expected to reach 3 months. In the later period, there is a large gap in grain consumption in the market, and after June, the source of grain will rely on the policy grain with higher cost, and the main body of the market is bullish. From the perspective of North China, the overall progress of grain sales by farmers in Henan, Hebei and Shandong has reached 60%, and the surplus grain of farmers is nearly 40%, and the supply is relatively adequate. Before the Spring Festival last year, corn sales in North China were slow. However, from March to April after the Spring Festival, a large number of corn in Hebei, Shandong and Henan went back to the northeast, which led to the rapid consumption of local corn. At the same time, the inventory of grain enterprises was generally low, and there was a serious grain shortage from July to August.

At present, with the purchase of storage capacity in Northeast China, some North China corn still has the possibility of going back, but the enthusiasm of local trading enterprises and grain enterprises in building stocks is higher than that of the previous year, which leads to a rise in local corn prices and a narrowing of the corn price gap between inside and outside the customs. Corn reversal market will be more

Great inhibition. However, from the overall situation, due to the large amount of temporary storage and acquisition in Northeast China, there will be a large gap in the supply of commodity grain in the market, and the market will still rely on policy grain sources in the later stage, and there may be a large number of wheat replacing corn in stages. At the same time, in view of the high cost of policy-oriented food sources, corn prices in North China are expected to continue to rise.

Demand for corn feed will be weak

2014 had a very challenging year for pig farmers, with pig prices falling and profits losing, rarely seen in history.

Pig farming continued to lose money in 2014, the biggest loss since 2011, and the longest loss on record. It took as long as 12 months to fall from near the break-even line to the deep loss line, with pig food prices above 6 ∶ 1 in only two weeks at the beginning of the year, and even in peak consumption seasons such as the Spring Festival.

It is precisely because of the full-year losses in the pig market in 2014 that farmers have accelerated the elimination of excess sow capacity, especially in the fourth quarter of 2014. As a result, the market expects the number of live pigs to decline to some extent in 2015 compared with 2014, and the decline is likely to continue until the end of 2015.

Because, in order to increase the stock stock, the sow stock must first be started to promote the increase of the sow stock. it will not increase until more than half a year after the sow stock begins to increase, and the supply of live pigs will not increase until 12 months later.

Sow stocking is expected to take place in the second to third quarters of 2015, while the increase will not occur until the end of 2015 or even the first half of 2016, and the pig stock will continue to decline slowly throughout 2015. The decline of pig stock will put great pressure on the feed market and the corn market in the upper reaches of the feed raw material market, and the feed demand of corn will be weak.