Focus on the impact of agricultural policy adjustment on prices

The external economic environment is still not calm.

On December 17, 2015, the Federal Reserve announced that it would raise interest rates by 25 basis points for the first time in more than nine years. Since the financial crisis at the end of 2008, the ultra-low zero interest rate policy has come to an end, indicating that the US economy has completely entered a new period of healthy growth. Although the Fed's decision to raise interest rates is fully in line with market mainstream expectations, and most of its influence has been digested by the market hype over the past two years or so, this does not mean that the external economic environment of the agricultural futures market is calm.

Over the past year, economic growth at home and abroad has continued to decline. In the state of declining economic growth, the market demand for agricultural products, especially bulk agricultural products, is declining, the market fatigue is difficult to recover in the short term, and the prices of wheat, corn, soybeans and their downstream products are difficult to perform well. However, sudden economic events will still provide themes and opportunities for large fluctuations in the futures prices of agricultural products. After the Fed decided to raise interest rates, prices in commodity markets, especially agricultural products, did not change much, while the Argentine government lowered the export tax on soybeans, which led to a drop in international soybean prices, but this only lasted for one day.

Argentina is a large agricultural country in South America, and staple agricultural products such as soybean, corn and wheat play an important role in its export structure. Argentina has an average annual soybean output of about 55 million tons, making it the third largest soybean exporter in the world; corn output is as high as 25 million tons, about half of which is exported, making it the second largest corn producer and exporter in the world. In the past two years, Argentina's weak economic growth, coupled with the government's measures to raise agricultural export taxes, foreign exchange controls, and export restrictions, have reduced the enthusiasm of agricultural producers, and exporters hoarding and sparing sales have led to a sharp drop in export volume. According to Argentine media estimates, the current agricultural production and export sector hoarded soybeans in previous seasons is estimated to be worth 8 billion US dollars.

At present, major economies in the world are introducing various policies and measures for economic growth, which will have a far-reaching impact on economic and global economic trends in the future, and the agricultural futures market will also be deeply affected by these policies and measures.

From the perspective of the international market, first, the recovery of the global economy is not as expected. Although the US economy has recovered stably and entered the cycle of raising interest rates, international institutions such as the World Bank and IMF are still not optimistic about the expectation of global economic growth. As a result, further strengthening expectations of the appreciation of the US dollar will cause significant volatility in global commodity prices, stock markets and foreign exchange markets. Second, China and Europe are still cutting interest rates. There are great differences in the economic status of the world's major economies. If the economic growth of these economies fluctuates at a low level over a long period of time, it will lead to a decline in global trade flows and a weakening of the market's demand for agricultural products. Third, the economic policies of Japan, India and other countries have been adjusted from time to time, which will stimulate frequent fluctuations in agricultural prices.

Specific to the external economic environment of the domestic agricultural futures market, under the premise of slowing economic growth, agricultural prices will not rise sharply when there is more, and it is more likely to maintain low and stable operation. At present, the domestic economy is still in a critical stage of structural adjustment, and traditional industries are not only removing inventory but also capacity. Although under the situation of greater downward pressure, policies such as stabilizing growth will be further strengthened, and monetary policy will be loosened to a large extent and gradually become loose, some market participants believe that the low growth rate of GDP has become normal, the industrial demand for agricultural products has decreased, and the monetary easing policy will not be effective in the short term.

At the same time, from the analysis of the current main imported varieties and quantity, the price of oil and oil has been completely dominated by the international market. The annual import of 80 million tons of soybeans and the rapid growth of imports of soybean oil, soybean meal, rapeseed, rapeseed, corn, sorghum and barley will further weaken China's pricing power and initiative on these agricultural products. The characteristics of China's agricultural product prices following the fluctuation of the international market will also be more obvious.

The adjustment of China's agricultural policy has entered a peak.

After all, the external economic environment is not the main factor that determines the rise and fall of agricultural prices, and the internal factor that determines the long-term trend of agricultural prices is still the relationship between market supply and demand. Due to falling demand and oversupply in 2015, the global futures prices of agricultural products continued to decline, and the futures prices of many agricultural products fell sharply again after halving. At the same time, the phenomenon of "three highs" in China's grain market, that is, high output, high purchase quantity and high inventory quantity, deserves special attention. In the future, how to solve these problems and how to adjust agricultural policies will have a great impact on the prices of agricultural products.

The reporter learned from the National Bureau of Statistics that the total amount of grain in China reached 621.435 million tons in 2015, an increase of 14.408 million tons or 2.4 percent over 2014, achieving the 12th consecutive year of growth. From the analysis of the reasons for the increase of total grain output in China, it is mainly caused by the increase of sown area and the increase of per unit yield. The sown area of grain in 2015 was 1.700107 billion mu, an increase of 9.269 million mu or 0.5% over 2014. The average national grain output was 365.5 kg / mu, an increase of 1.8% over 2014. The continuous increase in grain production has eventually led to high inventories in major grain producing areas in the country. for example, the grain inventory under the central authority in Heilongjiang has exceeded 100 million tons, a new record high.

In a market interview, the reporter found that the futures prices of major agricultural products such as soybeans, corn, sugar and cotton in the international market were suppressed by oversupply in 2015, and the futures prices of agricultural products such as soybeans plummeted. What attracts more attention is that because the price of China's agricultural products is higher than the international market price, the import quantity of China's agricultural products is huge, which on the one hand aggravates the difficulty of selling agricultural products, increases the market supply, increases the inventory, and impacts the price of agricultural products; on the other hand, it makes the development of domestic agricultural industry difficult, thus causing the relevant departments to pay attention to the development of agricultural industry. There has been a major adjustment in China's policy on agriculture, which will lead to changes in the institutions participating in the agricultural futures market.

At present, there is a large gap in the competitiveness and price level of China's agricultural products compared with the international market, the current situation of a large number of imported low-priced agricultural products is difficult to change, and the impact of the international market on domestic agricultural products is still great. Domestic agricultural policy adjustment has entered a peak. From the perspective of many latest agricultural policies, the mode of agricultural production, agricultural planting structure, price formation mechanism and so on are being adjusted frequently.

Some policies have been put forward in the proposals of the 13th five-year Plan, such as the pilot project of crop rotation and fallow, and the strategy of "storing grain in the land and technology", which has actually sent a signal of appropriate adjustment of grain output. Chen Xiwen, deputy head of the Central Rural work leading Group and director of the office, pointed out that importing barley, sorghum, DDGS, and cassava to replace corn has affected domestic corn sales, resulting in a backlog of unsalable sales, which is a prominent problem facing China's grain market at present. Therefore, for our government and farmers, the question that needs to be considered is what measures should be taken to regulate domestic food prices in order to curb the arbitrary growth of corn substitute imports.

In 2014, China launched a pilot project to subsidize the target prices of soybeans and Xinjiang cotton in Northeast China and Inner Mongolia. In 2015, on the basis of summarizing the pilot experience of target price reform, the relevant departments proposed to continue to implement the minimum purchase price policy for rice and wheat, and at the same time adjust the market policy for non-rations agricultural products such as corn. Since the new corn went on the market in 2015, the relevant departments have still implemented a temporary acquisition policy in Northeast China, which sharply reduced the purchase price of corn, which once caused a "cliff" drop in spot corn prices in the country and touched the income of farmers from growing grain. In addition, since the newly produced rapeseed was put on the market in 2015, the relevant departments have decided to basically cancel the temporary purchase of rapeseed, and the purchase price of rapeseed in producing areas has dropped by nearly 2000 yuan / ton compared with the price when it was listed in 2014. this shows the impact of policy adjustment on the price of agricultural products.

Attention should be paid to the financial attribute of the price of agricultural products.

During the period of rapid growth of the global economy, the financial attribute of the price of agricultural products is very strong. The entry of a large amount of money into the agricultural futures market pushed up the price of agricultural products and made the price deviate greatly from the value. At present, under the depressed economic environment, the global price of agricultural products is largely determined by its own supply and demand, but the impact of funds on the price of agricultural products can not be ignored, and the financial attribute of the price of agricultural products has not disappeared. just keep a lower profile.

In the past year, due to the shortage of funds, many enterprises in the agricultural industry chain have difficulties in survival. On the surface, the price of agricultural products is caused by insufficient demand, and the realization is caused by insufficient supply of funds. What is worthy of market attention is that when communicating with many investment institutions, Futures Daily reporters learned that in 2015, many investment institutions regarded agricultural products as macro hedges. On the one hand, they invested heavily in markets such as the stock market, on the other hand, they sold short in the agricultural futures market, and there was a strong new phenomenon of "hitting production capacity and profiteering" in the agricultural futures market. Therefore, 2016 will still be a turbulent year for capital markets, with many events such as interest rate hikes by the Federal Reserve, interest rate cuts and reserve rate cuts in China, and the financial nature of agricultural prices may be stronger.

The futures market of agricultural products will develop for a long time.

With the industrialization and systematization of listed varieties in the domestic agricultural futures market, more and more agriculture-related enterprises are involved, the price guiding role of the agricultural futures market is becoming more and more obvious, and the development of the agricultural futures market has been recognized and supported by the market. It is estimated that the agricultural futures market will be more active in 2016.

In 2015, the CPC Central Committee and the State Council issued several opinions on strengthening Reform and Innovation and speeding up Agricultural Modernization (hereinafter referred to as "opinions"). The "opinion" focuses on promoting agricultural restructuring, innovating the circulation mode of agricultural products, developing futures trading of agricultural products, developing new varieties of futures trading of agricultural products, and making overall use of two kinds of resources in international and domestic markets. This has a lot to do with the long-term development of the domestic agricultural futures market, and points out the direction for the development of the domestic agricultural futures market. The "opinion" has given the agricultural futures market a new content and mission, and the agricultural futures market has a broad service space in speeding up the modernization of agriculture with Chinese characteristics.

In order to improve the degree of marketization of agricultural products, it is necessary to vigorously develop the futures trading of agricultural products, which requires the government and the management departments of various industries to simplify administration and delegate power, and let the market solve the market. At present, some industry management departments have abolished the trade rules that do not allow state-owned enterprises and other enterprises to participate in futures trading, and some departments have begun to encourage grain enterprises to use the futures market to avoid operational risks. more and more enterprises in the agricultural industry chain are willing to use futures tools to serve the production and operation of enterprises. When customers in the agricultural industry actively participate in futures trading, the capacity of the agricultural futures market will be expanded, the prices formed by the market will be more representative, and the guidance for the development of the domestic agricultural industry will be stronger. A flexible agricultural product market mechanism will be formed.

After more than 20 years of development, rapeseed, rapeseed oil, rapeseed meal, soybean, soybean oil, soybean meal, corn starch and other grains and their processed products which have been listed in the domestic agricultural product futures market have formed a relatively complete industrial chain. the production, circulation and trading enterprises in the industrial chain of these varieties have participated in the futures market on a large scale, and the effective use of futures tools provides risk control guarantee for enterprise management.

At present, in the futures markets of sugar, cotton, wheat and other agricultural products, many large and medium-sized agricultural enterprises are very active. With the emergence of new cooperative organizations in the field of agricultural production, the foundation for the long-term and stable development of the agricultural futures market will be more solid. In the future, the product system of the domestic agricultural futures market will be more perfect, the trading scale will go up to a new level, and the market investment opportunities will increase a lot.