IndustryCorn faces its biggest 'frenzy' before the Spring Festival
Yesterday, the arrival of goods in Shandong exceeded 1000, and many companies began to decline, but the overall magnitude was not significant. Currently, everyone's focus is on whether prices will continue to fall in the future. In the Northeast region, after a long decline, signs of a rebound were finally seen yesterday. In addition, the peak harvest season in the Heilongjiang area has passed, and the market is truly entering a "new era". From the current market situation, the corn market will usher in the biggest "frenzy" before the Spring Festival. Grain holders need to be prepared!
First of all, let me make a point that corn in Shandong is not stagnant, and corn in Northeast China is also not stagnant. Regarding the issue of price reduction in Shandong, we have mentioned many times in previous articles that the surge in arrivals in Shandong occurred overnight. We suggest that everyone import and ship. Now that Shandong's arrivals have exceeded 1000, the editor still suggests that everyone can continue to ship, but pay attention to the changes in the arrival situation today and tomorrow. If the arrivals continue to increase, then stop shipping quickly, otherwise you can continue to ship!
This year, channel inventory is at a low level. With the recovery of downstream demand after entering the fourth quarter, the operating rate of deep processing enterprises has increased, which to some extent benefits corn prices. However, I need to remind everyone that we are still in the stage of loose supply, and enterprises will not exceed the expected increase. Currently, the North China and Shandong regions have basically reached the level of 2200, which has also met the psychological expectations of some grain holding entities. With the surge in arrivals, the price reduction of enterprises has become a smooth chapter! However, everyone can rest assured that the possibility of a major ｄｒｏｐ is extremely low, and the market will at most enter a period of repeated fluctuations. As the weather turns colder, the shipments of grassroots farmers will decrease, and channel inventory will also increase. This wave is likely to lay a good foundation for the corn price increase before the Spring Festival, with an increase of at least 100 yuan on the current basis!
As for the issue of Northeast grain entering the country, we have already discussed it in the article two days ago. The entry of Northeast grain into the country cannot be stopped, especially since the prices inside and outside the country have been adjusted. However, the bottom line price for Northeast grain entering the country is between 1-1.1 yuan/jin, which has an impact on North China but is not as serious as everyone thinks!
In the past two days, many customers in the Northeast region have asked me two main questions: first, how long will the Northeast grain prices continue to decrease, and second, is there still a chance for an increase?
To answer the first question first, although the harvesting season in Heilongjiang has passed its peak, Jilin and even Inner Mongolia are currently in the midst of it. At the same time, the willingness of local farmers to ship is not low, and traders are hesitant to build warehouses, resulting in sufficient grain circulation in Northeast China at present. Prices are prone to decline but difficult to rise in the short term. From the recent situation of enterprise arrivals, the listing of Chaoliang is in a concentrated period, and enterprises and China National Grain Reserves Corporation have not launched large-scale acquisitions at this stage. Prices still have room for decline. As mentioned earlier, the bottom line price of Chaoliang (30 water) in Northeast China is expected to be around 0.75 yuan/jin, and dry grain should be between 0.95-1 yuan/jin! Considering that there is not much price difference in the Northeast region at present, you can refer to the current local prices for judgment!
Regarding the question of whether the grain prices in Northeast China can increase, the personal opinion of the editor is that they can increase, but the upper limit of the price is relatively strict. The main reference is the policy of China National Grain Reserves Corporation for storage and the one-time reserve opened after New Year's Day. According to the publicly available prices, the price ceiling is 1.1 yuan. The mainstream price is 1-1.05 yuan/jin! As for the market being shrouded in pessimistic sentiment, this is a misunderstanding and can only rely on the support of China Grain Reserves Corporation and the market's self rest. However, I suggest that when selling grain, we must rely on concentration, not only now but also before and after the Spring Festival.
At this stage, traders can start building and purchasing warehouses. As the weather gets colder and prices begin to hit bottom, China National Grain Reserves Corporation is also eager to try. Don't hesitate now. Although Jilin region has not yet been concentrated in the market, there is a possibility of further price drops, but the magnitude is not significant!
Summary: October is coming to an end, and the overall trend of corn prices has self repaired after a sharp decline. Although the current price is not high, it is highly likely due to various factors. As for whether corn can still rise to 1.4 yuan or even higher, the editor's opinion is difficult. Before the Spring Festival, Shandong enterprises are likely to maintain a price of around 2200-2300 yuan/ton! The current situation of mixed long and short positions determines that the purchasing side will occupy a dominant position. In the future, we will focus on weather changes, policy storage and procurement situations, as well as the start-up and stocking situation of enterprises! As for the demand for feed, although there has been a rebound, it falls short of expectations and has little effect on the rise of new corn prices! In the middle of the month, we will focus on the harvesting rhythm in various regions, the quality and yield of new corn, changes in grassroots grain sales sentiment, intentions of trade and downstream enterprises to build warehouses, and policy trends.
In the past two days, wheat prices have started to turn around, with an increasing number of companies experiencing a decline. Although the decline is not significant, it cannot be ignored as it stimulates the mentality of grain holders. As for the reason for the decline, it is due to the increase in market circulation of grain sources and the significant increase in goods received by companies. However, as companies lower their prices, the amount of goods received will also decrease. After all, the clearance period has passed, and there are still more than two months left until the Spring Festival. Grain holders' mentality is relatively stable! As for the question of whether it can still rise, the answer from the editor is that it can rise. After all, not only are enterprise inventories insufficient now, but policies to collect and store are also underway. In addition, with the decrease in temperature, the peak season for flour consumption has also arrived!
Summary: In the foreseeable future, fluctuations in wheat prices are inevitable, but the bottom line of prices is constantly being raised. The confidence of grain holders in wheat has also been restored, and there is still hope for wheat prices this month. Regarding the current market, the editor would like to say two points. Firstly, according to research, some flour milling enterprises do have insufficient inventory and need to replenish inventory. Among them, Wu Deli has shown more obvious performance. However, those small and medium-sized flour milling enterprises, due to financial problems, are unlikely to build large warehouses themselves. Secondly, with the passage of time, the market circulation of grain source areas is stable, and there is even a downward trend, which is conducive to the stability and strength of wheat prices. After all, wheat has an official minimum protection price. Currently, there are grain depots in various regions undergoing rotation, and prices are unlikely to collapse easily, But if wheat really wants to see a significant increase, it may have to wait until the next cycle - New Year's Day and Spring Festival!
