It is difficult to have a good performance in the corn market with the coexistence of multi-short factors.

At present, the domestic corn market can be described as the coexistence of long and short factors. On the one hand, China's temporary storage corn acquisition continues to be in full swing, but the market interpretation of it is becoming more and more rational. When the temporary storage corn inventory is about to break through the 200 million ton mark, the continuous futures price has reached the policy upper limit level, and the futures market has taken the lead in a rational correction. After all, the huge temporary storage corn vault will become a space to contain the price rise for a long time; on the other hand, rumors of various policies at the end of the year, such as targeted sales and another reduction in the purchase price of temporary storage corn in the new year, are frequent, which is bad for the market psychology. In addition, the end-of-year demand sluggish starch prices decline, serious alcohol losses restrict the willingness of processing enterprises to start, coupled with the future subsidy policy is not clear, the acquisition enthusiasm is greatly reduced. There is still a week to go before the end of 2015, and under the combined influence of the above factors, it is expected that the domestic corn market will not perform well.

Market performance

Performance one: the northeast corn market is moving steadily. Since late December, the weather conditions in the northeast producing areas have improved, the progress of grain sales by farmers has been accelerated, and the purchase quantity of corn in temporary storage has returned to a higher level, forming a bottom support for corn prices. However, some deep processing enterprises maintain a cautious purchasing attitude because the future subsidy policy is not clear. At the same time, most of the traders wait and see because of the low profits in the intermediate link and the poor flow of goods in the sales area. affected by this, the overall price of corn in Northeast China is relatively stable and fluctuates slightly in some parts. Up to now, the entry price of 15% moisture third-grade corn from deep processing enterprises in Zhaodong, Heilongjiang Province is 1790 yuan / ton, which is basically stable; 1880-1910 yuan / ton in Changchun, Jilin Province, down 10 yuan / ton from last weekend; and the entry price of deep processing enterprises in Shenyang, Liaoning Province is 1950-1970 yuan / ton, down about 10 yuan / ton compared with last weekend. Processing enterprises reported that at present, the purchase of corn has increased, and the number of grain delivery vehicles has increased significantly compared with last week.

Performance 2: the purchase price of North China Deep processing has been reduced. Since late December, the weather in North China has improved, and the amount at the grass-roots level has increased, but at present, the moisture content of grain sources at the grass-roots level is still on the high side, the willingness of enterprises to purchase is not strong, and the inventory of enterprises is still at a low level. From the current overall acquisition situation, the price of high-quality corn with low moisture is higher, on the contrary, the price is low, and the polarization is more prominent. At the same time, with the continuous weakening of grain prices in Hebei, the purchase of corn in Hebei in Shandong and other peripheral areas has increased, and the sales psychology of grass-roots farmers in North China as a whole is stable. Up to now, the entry price of Shandong Shouguang gold corn 14.5% moisture third-class corn is 1920 yuan / ton, down 20 yuan / ton compared with last weekend; Shengtai Pharmaceutical 14.5% moisture third-class corn entry price is 1930 yuan / ton, down 30 yuan / ton compared with last weekend.

Performance 3: the price of corn in the north and south ports is stable and strong. The temporary storage acquisition data of this issue show that the pace has not slowed down yet, and the relatively strong grain prices in the producing areas support the steady upward price of the northern ports. At present, the main sources of grain in the northern ports are Inner Mongolia and western Liaoning, and the limited dry grain in North China has a very limited impact on the acquisition of Beigang. However, at present, the level of traders is not good, and the risk of the late trend of grain prices is still high, prudent acquisition and shipping led to low inventory in southern ports, and corn transactions in Guangdong Port are temporarily strong. Up to now, the mainstream price of corn purchased by the northern Jinzhou port is 2060 yuan / ton, and the trimming price is 2090-2110 yuan / ton. The arrival price of northeast corn in Guangdong port is about 2200-2220 yuan / ton, up 10-20 yuan / ton from last weekend, while the arrival price of corn in North China is 2170-2190 yuan / ton, up about 10 yuan / ton from last weekend. The price of corn in Guangdong port is strong, mainly because of the small inventory of corn in the port. On the 21st, the amount of corn in Guangdong port was 102000 tons, 42% lower than the previous month and 85% lower than the same period last year. At the same time, the price of corn in Guangdong port rose slightly, the price of imported sorghum barley increased significantly, and the price difference between import sorghum barley and corn narrowed, but the price advantage was still obvious. At present, the prices of sorghum and barley in Guangdong port are about 1950 yuan / ton and 1720 yuan / ton respectively, and the price difference between sorghum and corn is about 260yuan / ton and 490yuan / ton respectively, which is still significantly higher than the substitute critical price difference. It is expected that the advantage of importing sorghum barley will remain in the short term, as there is little room for further decline in corn prices in Guangdong ports.

Influencing factors.

Factor one: the acquisition of temporary corn continues to be in full swing. According to statistics, as of December 20, the total purchase volume of corn stored in Northeast China has reached 42.62 million tons, with Heilongjiang, Jilin, Liaoning and Inner Mongolia accounting for 56%, 23%, 4% and 17% respectively, and the weekly storage progress has been maintained at a level of more than 5 million tons. The acquisition maintains a fast pace, which in turn forms a certain support for the domestic corn spot market. At the same time, as China's temporary corn inventory is approaching the 200 million ton mark, the government has not yet introduced any inventory reduction measures (rumored targeted sales, etc.), and the pressure of releasing the stock is increasing in the later stage. At the same time, since the continuous corn 1601 contract price successfully broke through 2050 points on December 9, with the rapid progress of temporary corn acquisition, the futures market has maintained a strong and volatile pattern. However, the current temporary corn acquisition can not fundamentally solve the problem of high domestic inventory pressure, but only delay, so the market began to sell short psychology, it is a rational move.

Factor two: the decline in starch prices restricts the willingness of enterprises to start up. Since December, the rising trend of new corn prices in the main domestic producing areas is near the stored price, and there are many rumors about the temporary storage corn policy, resulting in corn production enterprises purchasing wait-and-see, short-term corn prices to maintain a narrow oscillation. At the end of the year, the terminal demand was sluggish, the inventory of corn starch manufacturers increased, the price of starch continued to decline, and the production loss of the deep processing industry increased. In the past week, the domestic corn market price fluctuated in a narrow range, the market purchase and sale was relatively deadlocked, the tempo of corn listing in North China accelerated, and the corn purchase price of deep processing enterprises fluctuated from 20 yuan to 40 yuan per ton, with a price range of 1870 yuan to 1990 yuan per ton. the local purchase standard of corn for temporary storage in Northeast China was tightened, and the corn purchase price range of Northeast deep processing enterprises was stable on a weekly basis.

It is understood that the current Jilin corn starch processing loss of 90 yuan, including new grain subsidies after a profit of 160 yuan / ton, Shandong starch processing loss of 96 yuan / ton, the end of the year terminal demand is sluggish, corn starch prices continue to decline, corn by-product prices remain stable; Heilongjiang alcohol processing loss is flat at 568 yuan / ton, recent corn alcohol remains depressed and DDGS partial rise. Recently, it is estimated that the operating rate of starch industry is 75%, and that of alcohol industry is 56%. Generally speaking, recently, the cost and price of domestic corn raw materials fluctuated narrowly, the price trend of corn deep processing products was close to the influence of supply and demand, the terminal demand for starch and alcohol was sluggish at the end of the year, and the market price was stable. The inventory pressure of corn by-product manufacturers is relatively small, and the quotation remains strong. Towards the end of the year, the subsidy policy for deep processing in Heilongjiang Province has been delayed, while the subsidy for new grain in Jilin Province is coming to an end. In the later stage, we will pay attention to the trends of corn policy in Northeast China, and whether deep processing enterprises can continue to enjoy the policy "dividend".

Factor 3: corn stocks in the northeast port hit a new high. Monitoring showed that on December 18, the corn stock in the four northern ports was 2.6 million tons, an increase of 110000 tons in a week, the highest inventory level since the end of August. The weekly bulk grain volume was 199000 tons, 37000 tons less than the previous week. So far this year, the total amount of bulk corn grain in the four northern ports has totaled 2.236 million tons, compared with 4.448 million tons in the same period last year, a decrease of 49.7 percent. There are two reasons for the increase in corn stocks in the four northern ports: first, the progress of corn sales by local farmers in Liaoning has been accelerated. Monitoring shows that as of December 22, the progress of corn sales by farmers in Liaoning was 44%, an increase of 6 percentage points a week. 6 percentage points slower than the same period last year, but the backwardness has narrowed. Second, the volume of the four northern ports continues to be on the low side. Recently, corn prices in North China have declined, and the disadvantage of corn prices in Northeast China has been further highlighted. It is expected that it will be difficult to increase the volume of corn in the short term.

Factor 4: the medium-and long-term inventory reduction target may be a constraint. Last week, due to a significant loss in the north-south grain trade (2160 yuan per ton of corn in Guangdong and 2100 yuan / ton in the mainstream of the northeast port), the price of corn in Guangdong port rebounded in the second half of the week, as the expected volume of arrival decreased in the later period. Market analysis believes that as the end of the year approaches, it will take about half a month to purchase corn from the northern producing areas and collect the port to the south, and the increase in stock demand before the end of the year may promote a rebound in the corn market in some areas where prices have been upside down for a long time. Of course, in view of China's medium-and long-term corn inventory reduction target remains unchanged, and at this stage, the northeast corn price has been close to the market price level, this may become a constraint in the later price rebound process.

Outlook for the future

Looking forward to the future, according to the current implementation of temporary storage corn acquisition, the effect of policy support is still significant before the end of temporary storage acquisition, and it is necessary to guard against local risks caused by policy uncertainty (such as targeted sales and subsidies for transporting grain from the north to the south). At the same time, the current corn demand enterprises as a whole maintain a low inventory state, whether deep processing enterprises or feed processing enterprises, the inventory level is basically safety-oriented, and the willingness to purchase too much is not strong. And recent rumors may have targeted sales, this move will further suppress the procurement enthusiasm of deep processing enterprises. However, it is worth noting that the corn market in the northern and Guangdong ports, which were suppressed in the early days, rebounded. After all, in the short term, the inventory level of domestic grain enterprises at the end of the year is generally not high, and the continuous upside-down has led to a reduction in the amount of corn transported to the south. In addition, the demand of grain enterprises to prepare goods before the year is easy to rebound. Of course, we need to be aware that in the medium-and long-term domestic corn storage as the primary goal, targeted sales and other policy uncertainties will maintain a strong market price of an obvious "constraint". At the same time, whether the high temperature in the north will lead to the decline of corn quality is also worthy of our attention.