Domestic corn is common in February, can it be sustained in March?
In February, especially after the Chinese New Year, due to the strong festive atmosphere, the frequent warm winds of the policy, and the combined effect of rain and snow in major areas, China's corn supply was temporarily tight, which led to the rise in corn prices.
Because in some places, farmers still have a lot of grain in their hands. Therefore, whether the price of corn in March can continue the rise in February has also become a hot issue at present. This article will provide a brief analysis.
First, let's understand what has been driving the recent increase in cereal prices. With the advent of the Chinese New Year, with the decrease in the activity of the market, China's grain ** gradually decreased, and the ** corn ** also began to stabilize.
With the end of the new year, the trade of enterprises has not fully resumed, and the region is still in rainy weather, so the amount of corn is not much, resulting in a temporary contraction of available supply in the market. Since the beginning of this year, businesses and downstream grain enterprises have a small hoarding strategy, and after the New Year, the inventory of major grain enterprises has dropped to a low level, and there is a certain demand for hoarding. Due to the contraction of supply in the early stage and the increase in market demand for corn, downstream enterprises have increased their purchases**, which has driven the price of corn.
From the perspective of various regions, after New Year's Day, heavy snow and low temperatures are conducive to hoarding grain, therefore, the enthusiasm or initiative of grassroots farmers to sell grain has been reduced, the amount of grain on the market is getting smaller and smaller, and the first merchants and deep processing companies are also actively raising prices, thus promoting the rise of grain in the surrounding areas. Since then, due to the promotion of national policies and commercial reserves, the optimism of the market has been greatly boosted, and in February, the average price of corn in the entire northeast region has increased by 60-110 yuan. However, we should also see that at the end of the month, merchants in some ports are already trying to lower their purchase prices due to the increasing volume of goods in the northern ports.
In North China, after New Year's Day, due to rain and snow, the grassroots level has not completely returned to the original level, and at the same time, downstream enterprises are gradually increasing inventory, making some deep processing enterprises have raised their prices to promote acquisitions; Due to the later period of climate warming, although the supply has rebounded slightly, the enthusiasm of merchants is still high, and the average price of corn in North China in February has also rebounded slightly, at 30-60 per tonne.
In terms of sales, as of February 29, the average progress in grain sales in the Northeast was 58 percent, down 11 percent year-on-year. Heilongjiang was almost unchanged from the same period last year, while Jilin, Inner Mongolia, Liaoning and other places saw a relatively slow pace of grain sales. According to the survey data of relevant departments, the current grain storage area in Heilongjiang is about 90 percent, and the grain storage area in Jilin is about 30 percent. Due to the warmer weather, in March this year, northern China will usher in the peak season of "lying on the ground" sales, compared with February, this year's supply pressure will be further increased.
From the perspective of the market, in March this year, the main body of grain supply in Northeast China was local intensive processing enterprises and feed enterprises in the south. At present, the average inventory day of deep processing enterprises in Northeast China is about 24 days, which is lower than that of the previous year, and it is expected to increase the purchase momentum in March, which is good for corn**.
According to the demand of feed enterprises in the south, due to the New Year in February, the inventory of the northern port has decreased, and in March due to the need for a large number of purchases, the inventory of the northern port has also risen, which is more beneficial to the first of the corn, but because the market in March is still relatively sluggish, the consumption of corn will not grow much.
As far as intermediaries are concerned, 60% of small and medium-sized businesses now have 3,000-8,000 tons of inventory. As the price of corn continues to rise after the Chinese New Year, the intention of warehousing has gradually become cautious! However, as the major grain wholesale enterprises have begun to purchase, small and medium-sized businesses will also follow up, which is also good for corn.
Based on the above aspects, Xinnong Ming expects that in early March, as the temperature rises slowly, the pressure on supply weakens, coupled with the increase in buyers, corn may be adjusted at the first position; After the middle of the year, due to the warmer weather, the time for hoarding grain sales will become shorter and shorter, so in the case that feed companies continue to buy on demand, and deep processing and ** companies have the willingness to build warehouses, supply and demand will show a balance of supply and demand.
In northern China, grain sales in northern China averaged 42 percent as of February 29, down 19 percent year-on-year.
From a market point of view, the deep processing enterprises in North China started better after the New Year's Day holiday than last year, but due to the limited stock in the early stage, the raw material reserves of the enterprises after the holiday are generally less. According to the data of relevant departments, the current operation of intensive processing enterprises in North China has increased compared with the same period last year, reflecting the need for supplementary raw materials corn.
In the feed industry, at present, whether it is feeding grain or feed enterprises, the demand for corn is maintained at a relatively low level, and the growth rate of the market is not large, therefore, in the future for a period of time, due to the gradual resumption of work of feed companies, the enthusiasm for the purchase and purchase of corn will also increase.
In general, the supply and demand of corn in North China have been relatively tight recently, mainly corn. During this period, due to the enthusiasm of farmers to sell grain, as well as the replenishment of downstream demand, as well as the benign inventory of the first business, the corn and demand in North China will have a double growth, but due to the bottom of the grain stock, if the sales time is relatively concentrated, North China may have a slight decline in mid-March.
In short, in March, China's grain supply pressure is still very large, and the support for the market is also very limited, so there is still room for decline in corn. However, when the ** gradually declines, the willingness of the ** merchants to build a warehouse is getting stronger and stronger, coupled with the replenishment of some downstream feed companies, will bring some support to the ** of corn, so at the end of this month, the ** of corn may have a small rebound.