The risk of corn is increasing, the shortage of high-quality food sources may be alleviated.

Corn prices have risen sharply since June and July, driven by dry weather and tight supply of high-quality food sources, especially in 1409 contracts in recent months, with corn 1409 up about 14.58% and about 4.35% in just two months to the end of August. The rapid rise of corn futures prices in the early stage, apart from drought and supply problems, capital speculation is also an important aspect, so with the recent relief of drought in China, the gradual release of the adverse effects of drought weather on corn production and the imminent listing of new grain, for corn futures, which have accumulated a lot of market risks in the process of rising, there is the possibility of concentrated release of risks in the later stage.

The influence of the weather has been gradually digested by the market

In June, July and August, the continuous dry weather in the granary of the Central Plains and the main grain-producing areas in Northeast China led to varying degrees of difficulties in crop growth and drinking water for human and livestock. In early June, the drought began in Henan Province, and gradually spread to almost the entire northern region and Jiangsu, Anhui, Hubei and other places. By the end of July, the affected area of crops in the country's major arid provinces and regions had reached more than 72.3 million mu, and 1.6 million people and more than 2 million large livestock had difficulties in drinking water, and the drought situation further worsened in the first and middle of August. However, with the increase of rainfall since late August, the drought in some areas has eased. By the end of August, according to the State General Administration of Prevention and Control, the affected area of crops in the country has been reduced by about 20 million mu compared with that before rainfall.

The impact of drought on crop yield and quality has been basically reflected on the disk. With the improvement of the drought, the enthusiasm of funds in the weather speculation gradually faded, and the activity of corn futures prices declined. The focus of funds will continue to look for the next hot issue. Recently, there has been a high shock in corn prices, the upward momentum has weakened, and the weather factors have also been gradually digested in this wave of rise. In the later stage, the main factors that affect the trend of corn futures prices may be transferred to the supply of new grain.

The shortage of high-quality food may be alleviated.

For the early rise of corn, in addition to the impact of drought, the shortage of high-quality corn in the domestic market is also an important factor. The national corn grain source is abundant, but due to the high price collection and storage, most of the corn is concentrated in the national storage, and the quantity of corn in circulation in the market is limited, especially the high-quality corn grain source. Although the country began to dump and store corn in May, and imported corn also took part in the auction in July, the participating corn was basically from 2012 or previous years, and the transaction was depressed. Although the transaction of imported corn is active, because its low price and low quality can not change the market demand for high-quality corn, in recent months, manufacturers are willing to accept high-price and high-quality corn, and the spot price of corn also continues to rise.

At the end of August, corn participated in the auction in 2013, with a turnover rate of more than 90%, much higher than the 13% turnover rate of corn in 2012, and the transaction price also increased significantly compared with the previous period. With the corn auction in 2013 and the launch of new grain in October, the supply of grain on the market will increase, and the spot price of corn will be suppressed. Corn prices have been loosened in some areas, and corn demanders will lower purchase prices accordingly. Then reflected in the price of corn futures will be under pressure.

Terminal requirements are cautious

The continuous rise in the spot price of corn has increased the production costs of downstream feed enterprises, and some enterprises have adjusted their policies to relatively cheap wheat, further reducing the consumption space of corn; in addition, the high price also makes the downstream procurement cautious, and some manufacturers' corn inventory can be maintained for a period of time. At present, they pay more attention to the spring corn and early-maturing corn that are about to be on the market. For some enterprises with low inventory, due to the high auction price of corn in the State Reserve, some of them turned to low-quality and cheap imported corn; in addition, the stock of poultry meat in the Mid-Autumn Festival was basically over, and the demand for feed such as pigs fell in a short period of time. Therefore, under the double impact of the market expectation of new grain and imported grain, the terminal also has a strong expectation for the decline of corn prices in the later stage.

Another important area of corn consumption the overall situation of the deep processing industry is not optimistic, the demand of the alcohol industry has not kept pace with the opening rate, and the sales of alcohol, especially the high-priced alcohol market, is light. Although the price of starch has risen, compared with the rise of corn price, the production enthusiasm of starch production enterprises has been restrained.

In short, after pushing up the current price of corn in the same period, the market and funds are enthusiastic about corn speculation, coupled with the imminent listing of corn in the new season, for corn, which has accumulated a certain market risk, it will face a great risk of decline in the later stage.