How high can Crazy Corn jump?

Expert: High yield corn reality is difficult to change high price expectation

This year is the year when domestic corn prices fluctuate the most and rise the most. Domestic corn prices continued to operate at a high level under the pressure of policy regulation and control, and reached an all-time high of 2506 yuan/ton in the first half of this year. This year's corn output will also be the highest in domestic history. With the continuous opening of new corn on the market, it is a foregone conclusion that domestic corn will have a high yield. Under the background of high yield, what will be the trend of domestic corn price? At the 5th International Corn Industry Conference hosted by Dashang Institute on September 22, the exchanges and collisions of experts in the industry showed that it was difficult to change the expectation of high price due to high yield of corn, and the tight balance pattern of supply and demand was an important reason for market funds to be optimistic about corn price. Dalian corn futures market mainly reflects the changes in the domestic market and is becoming an indicator of domestic market prices.

Zheng Guichen, deputy general manager of Changchun Dacheng Industrial Group Co., Ltd., said that although corn production in Northeast China increased this year, it did not change the tight balance between domestic corn supply and demand, and this state will continue. At the same time, the cost of planting corn for farmers has risen sharply, greatly enhancing farmers 'prediction of rising corn prices. Corn planting costs rise, prices "rise" is inevitable.

In addition, international and domestic corn runs at high prices and has a relatively high base. Corn futures stocks are also at low levels in the United States and China, with the United States losing at least 10 million tons due to weather factors such as high temperatures and drought in August. It is unlikely that prices will fall sharply this year.

Zhao Yi, general manager of Dalian Shengwei Grain Group, believes that historically, there will often be lows after highs, and corn prices are not expected to fluctuate as much next year as this year.

Feed and deep processing industry demand is the biggest driver

Dongzheng Futures participants believe that breeding feed and deep processing demand is the biggest force pushing up corn prices. According to the northeast corn and soybean investigation organized by the company at the end of August and the beginning of September, due to the improvement of consumption level, the consumption speed of meat and eggs in China is accelerated, which leads to the increase of pig and meat laying hen stocks, and then stimulates the demand for feed, which is finally reflected in the rise of raw material cost. Corn, as the feed raw material with the largest proportion in feed, has become the focus of market attention since the beginning of 2010, driven by the heavy consumption demand of deep processing enterprises and feed enterprises.

According to the data of China Starch Industry Association, the total amount of corn deep processing in China in 2010 was 52 million tons. According to the proportion of corn deep processing in total corn consumption, it should be controlled within a reasonable level of 26%. In 2011, the total amount of deep processing consumption still reached 46.5 million tons. Although relevant departments have taken measures to curb the further expansion of corn deep processing capacity and control the total amount of corn consumption, the current situation shows that corn processing volume may still have an upward trend.

Representatives of Yongan Futures believe that although corn production has increased, the increase in demand is also considerable. As the piglets in the early stage of the breeding house grow up gradually, the demand for feed will gradually increase, obviously it will have a certain supporting effect on the demand for corn.

Dalian corn futures become price indicator of domestic market

Industry insiders attending the corn industry conference commented that futures prices and spot prices in Dalian corn futures market have good linkage, providing representative prices for the industry and effective market tools for investors.

According to Guo Xiaoli, deputy general manager of DCC, corn futures have been running steadily since September 22,2004 when they resumed trading in DCC. As of September 16 this year, the cumulative turnover in the past seven years was 287 million, with a turnover of 4.95 trillion yuan and a delivery volume of 3.02 million tons.

It is understood that from the operation of recent years, corn futures price trend is relatively stable, better reflecting the state's macro-control policies on the grain market. Especially since the end of last year, through a series of measures to maintain market stability, the spirit of the central government's policy on "stabilizing the overall price level" has been effectively implemented. It should be noted that since 2008, the correlation between Dalian corn futures price and international futures market price has decreased obviously compared with previous years, and the influence of external corn price fluctuation on domestic market has gradually decreased. Dalian corn futures market mainly reflects the changes of domestic market and becomes an indicator of domestic market price. A welcome trend is that relevant enterprises still maintain high participation in Dalian corn futures market. With the development of corn futures in recent years, the participation of investors in the market has been very high, especially spot enterprises. The total number of customers participating in Dalian corn futures trading this year exceeds 150,000, including 1492 legal persons.