Corn "roller coaster" new season market frenzy

1、 In September and October, the amplitude of corn in North China was close to 400 yuan/ton

In the past month, corn prices in North China have experienced a roller coaster ride. In early September, local corn procurement prices were still able to maintain around 2350 yuan/ton, but then began to decline at a rate of around 100 yuan/ton per week. By the end of the month, many companies had already lowered their listing prices to 2000 yuan/ton, and some even quoted prices of 1960 and 1980 yuan/ton. However, during the National Day holiday, prices in North China began to stabilize and quickly rebounded after the holiday. By the 11th, the listing prices of enterprises in North China had generally risen to over 2100 yuan/ton, and some regions had raised their listing prices to 2200 yuan/ton. The price dropped by 400 yuan in a month and then rose by 200-300 yuan in less than half a month, with fluctuations even exceeding the annual fluctuations of corn in the past, leaving market participants at a loss.

2、 The impact of production cuts is not as significant as weak demand, and the corn market remains weak

Although the water and heat conditions during the final growth period of corn in September were relatively well matched, the overall climate conditions in the early stage were not ideal, and there were expectations of reduced production in the market. Recently, based on feedback from grassroots research, the main corn producing areas in Northeast and North China have indeed experienced varying degrees of reduced production this year. However, various grain consuming entities remain unmoved. On the one hand, the rapid decline in pig prices and the rapid contraction of breeding profits have raised doubts among feed breeding enterprises about future inventory growth, and have not significantly increased raw material inventories; On the other hand, trading entities, due to widespread losses in the past two years, dare not act rashly. Therefore, the overall performance of the corn market is still weak. After the holiday, corn in Northeast China began to be listed, and the purchase prices of deep processing enterprises in Heilongjiang and Jilin were reported at 1940-2100 yuan/ton, a decrease of 30-110 yuan/ton from before the holiday. Prices in the North China region are more of an oversold rebound, with the overall price center still shifting downwards.

3、 Adjusting reserves and starting to enter the market for acquisitions, the short-term market is mainly focused on stability

At present, information obtained from various channels shows that the regulation and reserve of corn in Northeast China has begun to enter the market for purchase, with prices around 2050 yuan/ton. This is also consistent with the policy operation direction of wheat harvest period in May and June this year. The policy of collection and reserve provides price support to maintain corn prices above planting costs and appropriate profits, in order to ensure planting income and stabilize grain planting. Referring to the overall price of wheat in the North China market, after adjusting the reserve and opening the purchase, the price has remained between 2400-2500 yuan/ton. It is expected that the price of corn in the Northeast production area will also stabilize around 2000-2100 yuan/ton, equivalent to port prices expected to remain at 2100-2200 yuan/ton or above.

In summary, although the market expectations on the demand side are not ideal and the purchasing willingness has not significantly increased under the reduction in production, with the launch of reserve adjustment in Northeast China and the bottoming out recovery of corn in North China, it seems that the bottom price of the new season corn market has been determined due to price pulling. On the one hand, the impact of adjustment policies on corn prices has become increasingly stronger in the past two years, and the policy bottom seems to have been revealed; On the other hand, the price reduction in North China to 2000 yuan/ton was resisted by grassroots grain sales entities, which also indicates that planting cost support is more effective under reduced production. So if the import volume can be reduced in the future, there is a possibility of price improvement in the long term next year with the consumption of corn at the grassroots level. However, it is still necessary to pay attention to the release of imported corn reserves and the release of wheat to support the market. There are still many regulatory measures for the above two, and it is not easy to have high expectations for corn prices before the release strategy is clear.