MySheen

Where will the price of corn go in the second half of this year?

Published: 2024-11-22 Author: mysheen
Last Updated: 2024/11/22, Now that 2018 is halfway through, it seems inappropriate to ask whether corn prices will rise in 2018. To be exact, can corn prices rise in the second half of this year? As for this question, myself.

Now that 2018 is halfway through, it seems inappropriate to ask whether corn prices will rise in 2018. To be exact, can corn prices rise in the second half of this year? I have also expressed my views on this issue many times, and now I still say that after corn prices returned to the rising channel in July and August this year, they ran smoothly and were generally bullish.

I have analyzed the market of soybean in the second half of the year. There are many similarities between soybean and corn, but there are also many differences. One of the biggest differences is that the price of corn is greatly affected by the policy. Looking at the overall trend of corn this year, corn prices have been rising since the Spring Festival, but successive auctions of grain reserves in March have directly led to a sharp decline in the market. So far, the price has not rebounded!

Judging from the recent grain storage auction, the reserve price of the auction is getting higher and higher, and the market turnover rate is also getting lower and lower. The auction turnover rate on June 22 has dropped to 30%, which is not small enough compared with the initial auction turnover rate of more than 90%.

It can be said that it is difficult for the corn market to rise significantly under the guidance of policy, but this does not mean that there is no opportunity to rise in the future, the biggest factor is the reduction of effective corn supply in the market. This is the basis for the future rise in corn prices.

First of all, the drought in Northeast China this year has directly led to a reduction in corn production, which has reached a consensus in the industry. In previous years, the emergence rate of northeast corn was basically 80%, while this year's emergence rate was only 30-50%, with a large decline, and the yield reduction was also reasonable. Even if the corn is well managed in the later stage, the yield reduction is inevitable.

Second, trade problems between China and the United States have also led to a decline in corn imports. Judging from the latest news in mid-June, it has basically become a foregone conclusion for China to impose a 25% tax on corn imports from the United States. Although the amount of corn imported by China from the United States is not large, the reduction in import volume is also a major factor supporting the domestic corn price.

Third, the planting area of corn in China has decreased. The reduction in corn acreage comes from two aspects: on the one hand, the emergence rate of drought in Northeast China is low, and many farmers have uprooted corn and changed to other crops; and the second aspect stems from the strategy of expanding soybean planting area this year. Soybean planting subsidies are mentioned more than 200 yuan, and corn planting subsidies are reduced at the same time. It should be said that this strategy is also in line with the current national conditions. As a result, the domestic corn supply will be relatively tight this year.

Finally, the production capacity of many corn processing enterprises has been effectively expanded this year, and the government has also provided corresponding subsidies for the industrial corn processing industry. I am afraid this has something to do with the strategy of grain supply-side structural adjustment in our country.

Overall, in this year's tight domestic corn supply, consumer demand is difficult to increase, the domestic corn price is expected to be effectively supported next. And the next domestic grain storage auction is also expected to stop, so, next in the case of new corn failed to appear on the market, corn prices are expected to get strong support, the price trend is optimistic.

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