Drought map expands many granaries to welcome large roasted corn to bear the brunt

Since July, Henan, Shaanxi, Inner Mongolia and other places have suffered severe drought. At present, it is a critical period for the production of autumn grain. Under the "baking" test, what is the situation of grain production? Analysts interviewed by a reporter from the China Securities News pointed out that nationwide, the current dry weather has a limited impact on grain production, but some areas have been seriously affected. Among them, corn is the grain variety most affected by drought. at the same time, the yield of soybean and peanut has also been reduced to a certain extent.

As in previous years, the expectation of reduced grain production caused by drought has ignited the enthusiasm of capital speculation. Recently, the futures prices of corn, soybeans and other agricultural products have risen one after another, of which the corn index has risen 3.17% since July 16. The Douyi index has risen 5.91% since July 14, and even the always unpopular Zhengmai index has risen nearly 6% since July. Looking to the future, analysts believe that if the precipitation in the main grain producing areas continues to be low in mid-late August, with the expected further increase in grain production, the prices of relevant agricultural products may continue to rise in the future. However, in view of the early market hype on the drought, if there is precipitation in the later stage, the relevant futures contracts may also plummet.

Some areas have been seriously affected.

"at present, the overall drought is mild, but it is difficult for local people to drink. Affected by high temperature and little rain, high temperature and summer drought occurred in Jianghuai, Huanghuai, North China and parts of Northwest China. The recent rainfall process is very beneficial to alleviate the drought in the south-southwest, south-northwest, Jianghuai and Huanghuai areas. the drought in Jiangsu, Anhui, Shaanxi and other provinces has basically been relieved, and the drought in the western part of the northeast has emerged and developed. " Shu Qingpeng, inspector of the State Flood Control and drought Relief headquarters, said at a news conference that as of August 12, 65.89 million mu of crops had been affected by drought, with 2.35 million people and 2.54 million head of livestock suffering from lack of drinking water due to drought. The main drought indicators such as the area of crops affected by drought and the number of drinking water difficulties for people and livestock due to drought are lower than the average value of the same period of many years, but the difficulty of drinking water is prominent in some areas.

From a local point of view, the dry weather has a serious impact on grain production. According to the results of an in-depth investigation by a reporter from the China Securities News in Henan, canals in some parts of Henan have dried up, large areas of corn have lodged, most of the corn ears do not grow grains, and those with long grains are also few in dry grain. some long-grain corn cobs even have insect pests.

Liu Guoliang, a researcher on agricultural products from CIC Zhonggu Futures, pointed out that at present, the reduction in production caused by dry weather in some parts of North China has become a foregone conclusion, especially in some parts of Henan Province, if the precipitation continues to be on the low side in the later period, the extent of yield reduction will further increase; on the other hand, the damage to crops caused by drought weather in Liaoning, Jilin, Inner Mongolia and other places is still restorative, and if it rains in time in the later period, the northeast region can still get a bumper harvest.

However, Cofco futures researcher Meng Jinhui told reporters that the current dry weather may have speculation, the overall high yield of autumn grain situation may not be too much affected. Henan and other traditional "granary" provinces have relatively developed irrigated agriculture, and have experienced many times in fighting against drought in the past 10 years. Therefore, the impact of drought on autumn grain production may be less than market expectations.

Corn bears the brunt.

Analysts generally believe that corn will be the grain variety most affected by drought. Liu Guoliang said that the reduction in corn production in North China could reach 5 million tons, accounting for about 2.5 per cent of the country's total output, and the reduction could be even greater if the rainfall continued to be low in the later period.

"it is understood that the dry weather has also caused diseases and insect pests such as red spiders in some areas, and the dry weather in Henan may lead to a 10% to 15% drop in corn production." Pan Yu Candle, an analyst of agricultural products from the Yangtze River Futures, told reporters that for corn, the current spot price continues to rise, mainly because most of the corn produced last year was collected into the state storage, while the aquaculture industry was in the doldrums last year, and processing enterprises were short of inventories, resulting in a strong willingness of enterprises to purchase in the near future.

According to industry insiders, there is a certain gap in the short-term supply of corn in the spot market, but in the medium term, China's corn supply will still exceed demand in 2014 and 2015. Even if there is a certain reduction in corn production in 2014, given that the country still holds more than 70 million tons of state reserves, there will not be much upward pressure on domestic corn prices. As a result, the drought actually mainly affects the futures market and gives money the opportunity to speculate.

It is worth noting that the drought also affected the growth situation of some soybean crops. Liu Guoliang pointed out that Anhui and Henan are the main soybean producing areas, with a reduction of 50 to 700000 tons, accounting for 5 per cent of the country's total output. Although soybean production is likely to decline in 2014, starting from this year, the soybean market policy will be changed to the target price direct subsidy policy, and after the new season soybean is on the market in 2014, there is likely to be a surplus of supply and demand in the market. soybean prices are likely to fall sharply.

Meanwhile, peanuts are also affected by drought. It is understood that the reduction in peanut production in North China this year may exceed that of corn. " Liu Guoliang said.

As for varieties such as wheat and rice, analysts believe these varieties have been harvested before, so they will not be affected by the drought. However, it is worth noting that the current middle and late rice is in the period of heading and sowing, and the potential effect needs to be observed.

The possibility of continuous drought in summer and autumn cannot be ruled out.

At present, the Beginning of Autumn's solar terms have passed, and the harvest of autumn grain is gradual. Information from the Ministry of Water Resources shows that in mid-late August, the precipitation in the southern part of Northeast China, the northern part of North China, Huang-Huai and Jianghuai is still less than 30%, and the drought in some areas of Huang-Huai may continue or develop, and the possibility of continuous drought in summer and autumn cannot be ruled out.

"if the precipitation in the major grain producing areas continues to be on the low side in mid-late August, grain production will certainly be significantly reduced, and grain futures varieties may continue to rise in the future. However, in view of the early market hype on the drought, if there is precipitation in the later stage, the relevant futures contracts may plummet. " Liu Guoliang said that crop yields in northeast China are usually relatively stable, and the current degree of drought is much less than that in North China.

China imported 11.34 million tons of grain and cereal flour in the first seven months of this year, an increase of 80.7 percent over the same period last year, according to data recently released by the General Administration of Customs. Will the expected reduction in grain production lead to a big increase in imports?

In this regard, Meng Jinhui pointed out that at present, the main reason for China's grain import is not the gap in domestic grain supply, but that the state acquisition policy protects the growth of farmers' income, but also makes the prices of domestic rice, wheat, and corn higher than those in the international market.

"if there is only a 15 per cent reduction in corn production, the possibility of an increase in imports is very small. At present, the country still has a lot of reserves, which can not only meet the needs of the market by increasing dumping, but also reduce warehousing costs. " Liu Guoliang believes that in terms of soybeans, since domestic soybeans are mainly used for consumption, while non-genetically modified food beans are basically not available internationally, even if domestic soybean production is reduced, soybean imports will not be significantly affected.