The surplus grain is abundant but the demand is weak, where will the corn go in the future?
Although in January, China's cereals** still continued to decline on the whole. However, in the recent period, there has been a stable trend in grain, as the grain sales during the Spring Festival are nearing the end, grain hoarding enterprises have postponed grain sales to after the Spring Festival. So, what is the future trend of corn**? This article will provide a brief analysis.
January is the peak season for grain sales in China, and the grain market will continue to decline nationwide.
Analysis by region, the reasons for driving prices**. Due to the slow speed of grain sales in the market, the news of grain storage did not meet expectations, and the Spring Festival is approaching, the enthusiasm of grassroots farmers to sell grain has increased, and due to the sufficient supply, deep processing enterprises continue to reduce the purchase price, which further promotes the price reduction of grain in the surrounding areas.
On the dry corn, the feed company carries out inventory turnover according to the demand, while the first company is mainly in accordance with the previous order, with the increase in arrivals, the purchase of price reduction, so that the circulation of dry corn is blocked, which has a greater impact on the corn market in Northeast China. At the end of the month, at low prices, the willingness to purchase at the grassroots level increased, coupled with the approaching Spring Festival, the amount of spot goods gradually declined, and deep processing enterprises have raised their purchases, which promoted the stability of corn.
As of January 31, the average in Northeast China was 2,170 yuan per mu, down 155 yuan from the previous month, down 7% month-on-month, and down about 20% compared with the same period last year.
In North China, due to the market's sell-off of grain and sales requirements during the Spring Festival, the sales speed in January this year increased significantly, and with the increase in the number of arrivals, some deep processing enterprises also began to reduce prices. In addition, downstream companies are optimistic about the future and have a strong willingness to ship, which also accelerated the decline of the North China market.
As of the 31st, the average purchase price of agricultural products deep processing enterprises in North China was between 2310-2420 per ton, down 120-150 from the previous month. Currently, the market is trading at 2220-2320 per tonne, down 120-210 from the previous month.
On the supply side, as of 31 January, grain sales nationwide had reached 46 percent, up 16 percent from the previous month and roughly the same period last year.
In particular, grain sales in Heilongjiang made progress by 49%, 6 percentage points faster than the same period last year; The progress of grain sales in Liaoning was 54%, and the year-on-year growth rate was 2% higher than that of the same period last year; The progress of grain sales in Jilin was 32%, down 5% year-on-year; Grain sales in Inner Mongolia reached 40 percent, down 12 percentage points year-on-year.
From the perspective of grain structure, grain sales in Jilin, Inner Mongolia, Heilongjiang and other regions are relatively slow, mainly concentrated on the ground; The natural dry planting areas in China are mainly Jilin and Inner Mongolia. After the Spring Festival in Heilongjiang, the sales pressure is relatively short-lived, mainly from Inner Mongolia and Jilin, but with the increase in natural dryness and the extension of the sales cycle, the sales pressure may be smaller than expected.
In terms of circulation channels, although the current Northeast ** merchants have risen slightly compared with December last year, they are still significantly lower than the previous year, and after the Spring Festival, merchants will have a certain willingness to build a warehouse, which will bring certain support to the market.
For terminal grain enterprises, from the Spring Festival to the end of February, due to the reduction of consumption levels, feed enterprises have some inventory replenishment needs, at the same time, due to the low inventory in the market, coupled with the low number of grassroots procurement, therefore, the first corn in the supply of phased reduction and short-term increase in demand situation, boosted the corn stage of the first expectation.
At the end of February, the weather is warmer, the enthusiasm for hoarding and selling grain has increased, in view of the rise in corn toxicity, food resources will be the main body of the production area, in the case of sufficient supply, enterprises may lower the ** procurement, which may lead to the ** of corn.
In North China, after the Spring Festival, the temperature has not fully recovered, because housing prices have been in the first place, so the people have a strong hoarding and wait-and-see mentality.
Until now, most of the traders' inventories are below 200 tons, nearly double that of the same period last year. The active purchase of farmers, coupled with the low-cost inventory of the first trader, has a certain supporting effect on the first corn of the world.
For terminal grain enterprises, due to a large number of pigs, meat and poultry on the market before the New Year, and after the Chinese New Year into the peak season, it is difficult to increase the demand for feed, which has also had some negative impact on the corn market.
And judging from the past situation, the same is true for production enterprises in February. However, due to the start of construction after the year, some production enterprises began to stock up, which also has a supporting effect on the first corn.
In terms of imported corn, especially the relatively cheap Ukrainian corn, it is still more than 300 less than the corn in Donggang, which is a disadvantage for the domestic corn in February.
Comprehensive positive factors and unfavorable factors, the price increase of corn in North China in February also has a certain level, but due to the lack of demand from feed enterprises, the room for price increase is limited.
After March, as grain sales restart and supply pressure increases, it is likely that corn will go further. In April, due to the end of grain sales in various places, coupled with international climate factors, the first grade of corn is likely to rebound from the low.