Corn: Waiting for Flowers to Bloom

Summary of viewpoints

Core viewpoint: Neutral. As of December 4th, Ukraine's grain exports for 2024/25 were 18.584 million tons, higher than 17.764 million tons a week ago and an increase of 5.18 million tons from 13.402 million tons in the same period last year; The export volume of corn is 7.412 million tons. Last week, the temperature anomaly in the main corn producing areas of Brazil was relatively high, with less precipitation in the central region compared to previous years and more precipitation in the southern region. This week, it is expected that the temperature in the main corn producing areas of Brazil will still be high, with more precipitation in Rio Grande do Sul and more precipitation in the central corn producing states of Mato Grosso and Parana. The planting rate of corn in Brazil for the year 24/25 was 65.1%, which was faster than the previous year.

Last week, the national corn prices were weak, with a month on month decline of 14 yuan/ton. The overall price of corn in Northeast China has declined, with corn prices in various provinces dropping by 30-60 yuan/ton. Deep processing enterprises have continuously lowered their purchase prices. The price of corn in North China continues to decline, and farmers' enthusiasm for selling grain has increased. The overall purchase volume of grain points has increased. However, due to the weak willingness of grassroots grain points to keep inventory, the market has sufficient effective supply, and the amount of goods received by deep processing enterprises remains high. As a result, the purchase price of corn continues to decline. The price of corn in the sales area is showing a downward trend, and the purchasing and sales activities are flat. The quotations of port traders continue to decline, and the single decline is quite significant.

Last week, pig prices continued to decline. On the supply side, there has been an increase in the phenomenon of some breeding enterprises reducing weight and rushing to sell. The pace of small and medium-sized pigs being slaughtered has accelerated during the week, while the number of large weight pigs has slightly increased. Due to the early slaughter of some large-scale factories in certain areas, prices have decreased; On the demand side, the temperature drop in the south during the week was limited, and there was weak follow-up on demand for terminals and cured sausages. The increase in enterprise operating rates was not as expected. The frozen goods market still lacks positive support. This week, we will focus on changes in the pace of group market sales, changes in consumption after the weather turns cooler, and adjustments to macro consumption policies. In terms of deep processing, the profit of corn starch processing has improved, the operating rate of corn starch enterprises has increased month on month, and the consumption of corn has increased month on month. Focus on the profit changes and start-up changes of deep processing enterprises in the future.

Overall, the main corn contract fluctuated downward last week, hitting a low of 2035 yuan/ton before rebounding. On the one hand, the overall temperature has been relatively high since the beginning of winter this year. Due to the fact that corn sales are still dominated by trendy grains and traders have a weak willingness to store grain, the overall supply of corn in North China remains relatively loose; On the other hand, the issue of excessive levels of corn toxin in new market transactions has led to a weak willingness to receive feed supplies, and the purchase volume of storage points has also fallen short of expectations. Therefore, overall, the 2501 contract showed a fluctuating and weak trend last week. This week, we need to focus on the feedback of market sentiment after the release of the reserve increase news, whether there are traders building warehouses to collect grain, and pay attention to the progress of grassroots grain sales and weather changes in the future.

Origin situation: Neutral. As of December 4th, the grain export volume of Ukraine in 2024/25 was 18.584 million tons, higher than 17.764 million tons a week ago and an increase of 5.18 million tons from 13.402 million tons in the same period last year; The export volume of corn is 7.412 million tons. Last week, the temperature anomaly in the main corn producing areas of Brazil was relatively high, with less precipitation in the central region compared to previous years and more precipitation in the southern region. This week, it is expected that the temperature in the main corn producing areas of Brazil will still be high, with more precipitation in Rio Grande do Sul and more precipitation in the central corn producing states of Mato Grosso and Parana. The planting rate of corn in Brazil for the year 24/25 was 65.1%, which was faster than the previous year.

Domestic supply: Neutral. Last week, the national corn prices were weak, with a month on month decline of 14 yuan/ton. The overall price of corn in Northeast China has declined, with corn prices in various provinces dropping by 30-60 yuan/ton. Deep processing enterprises have continuously lowered their purchase prices. The price of corn in North China continues to decline, and farmers' enthusiasm for selling grain has increased. The overall purchase volume of grain points has increased. However, due to the weak willingness of grassroots grain points to keep inventory, the market has sufficient effective supply, and the amount of goods received by deep processing enterprises remains high. As a result, the purchase price of corn continues to decline. The price of corn in the sales area is showing a downward trend, and the purchasing and sales activities are flat. The quotations of port traders continue to decline, and the single decline is quite significant.

Feed demand: bearish. Last week, pig prices continued to decline. On the supply side, there has been an increase in the phenomenon of some breeding enterprises reducing weight and rushing to sell. The pace of small and medium-sized pigs being slaughtered has accelerated during the week, while the number of large weight pigs has slightly increased. Due to the early slaughter of some large-scale factories in certain areas, prices have decreased; On the demand side, the temperature drop in the south during the week was limited, and there was weak follow-up on demand for terminals and cured sausages. The increase in enterprise operating rates was not as expected. The frozen goods market still lacks positive support. This week, we will focus on changes in the pace of group market sales, changes in consumption after the weather turns cooler, and adjustments to macro consumption policies.

Deep processing demand: In terms of neutral deep processing, the profit of corn starch processing has improved, the operating rate of corn starch enterprises has increased month on month, and the consumption of corn has increased month on month. Focus on the profit changes and start-up changes of deep processing enterprises in the future.

Alternative situation: In terms of a large number of alternative products, the price of wheat did not change much last week, with a price difference of 316 yuan/ton between jade and wheat. Wheat replacing corn no longer has a price advantage.

Weather conditions: It is expected that strong cold air will affect most parts of China from the 10th to the 13th, with some areas in the northwest, western and northern parts of North China, Inner Mongolia, and central and northern parts of Northeast China dropping by 6-8 ℃. There will be light to moderate snow and locally heavy snow in the eastern part of Northwest China, central and western Inner Mongolia, western Sichuan Plateau, and western North China. Strong winds, cooling temperatures, and snowfall can easily cause snow disasters and low-temperature freezing damage to facility agriculture and animal husbandry production, increasing the cost of cold prevention, insulation, and management.

Foreign origin situation

United States: Corn Export Situation

On the week of December 6th, the net sales of corn exports from the United States for 2024/2025 were 1.732 million tons, an increase of 669000 tons compared to the previous week's 1.063 million tons; The total export volume of US corn is 11.384 million tons, with an outstanding sales volume of 22.808 million tons.

US: Situation of US corn exports to China

During the week of December 6th, the United States shipped 1.045 million tons of 2024/2025 corn exports, compared to 1.011 million tons the previous week; The United States shipped 0 million tons of corn to China (mainland region). Last week, it shipped 5000 tons of corn to China, a decrease of 5000 tons month on month. The cumulative sales volume to China was 26000 tons.

US: Net increase in US corn fund

As of the week ending December 6th, the long position of US corn was 272300 lots, a decrease of 8100 lots compared to the previous week; Short positions of 174800 lots increased by 9000 lots compared to last week.

As of the week ending December 6th, the net long position was 83900 lots, a decrease of 23100 lots compared to the previous week, indicating a decrease in long willingness. The lowest price of the CBOT corn main contract this week was 428.25 cents per bushel, and the highest price was 440.5 cents per bushel.

Brazil: Central corn producing region expected to experience high temperatures and heavy rainfall next week

During the week of December 6th, the temperature anomaly in the main corn producing areas of Brazil was higher than in previous years, with less precipitation in the central region and more precipitation in the state of Rio Grande do Sul; NOAA predicts that temperatures in Brazil's corn producing states will remain high in the next 6-10 days, with more precipitation in Rio Grande do Sul and more precipitation in Mato Grosso and Parana states in central southern Brazil.

Brazil: New corn sowing too fast

As of the week of December 6th, the progress of planting corn for the 2024-2025 crop year was 65.1%, slightly faster than last year.

According to the national average level weighted by the total sowing area of states such as GO, PI, TO, SP, MG, MA, MS, MT, and PR, the growth and development stage of the new crop of corn accounts for 62.6%, the germination stage accounts for 10.3%, and the flowering part accounts for 18.3%.

Brazil: Weekly corn exports increase month on month

According to Anec Brazil's latest estimate, Brazil's corn exports from December 1st to December 7th amounted to 1.5427 million tons, compared to 1.2442 million tons last week, an increase of 298500 tons compared to the previous week.

As of December 6th, according to Anec Brazil's latest estimate, Brazil's corn exports are expected to reach 3.5951 million tons in December, down from 6.4576 million tons in the same month last year, a year-on-year decrease of 2.8624 million tons.

As of this week, Brazil's cumulative export of corn from January to November 2024 was 34.022 million tons, a decrease of 15.079 million tons or 30.71% compared to 49.101 million tons exported from January to November last year.

Import cost: There is a slight advantage in importing corn from the West of the United States

As of December 6th, the January shipping cost of imported Brazilian corn within China's quota in the second half of the year is around 2184 yuan/ton, and the January shipping cost of American corn is around 2089 yuan/ton; The arrival cost of the January shipping schedule for corn in the western United States is around 2081 yuan/ton; The transaction price of bulk grain at Shekou Port is 2220 yuan/ton, with a slight advantage in the import of corn from the western United States in the distant months.

Domestic supply and demand situation

Weather: Pay attention to cooling and snowfall weather

As of the week of December 6th, temperatures in most agricultural areas across the country were close to or 1-2 ℃ higher than usual, with northeastern Inner Mongolia, southwestern Hebei, and central Henan being 2-4 ℃ higher. The precipitation in the western part of Jianghan, the western part of Jiangnan, and the eastern part of Southwest China ranges from 10 to 50 millimeters. Last week, snowfall occurred in northern Xinjiang, central Inner Mongolia, eastern and northern Heilongjiang, which was slightly unfavorable for facility agriculture and animal husbandry production.

It is expected that strong cold air will affect most parts of China from October 10th to 13th, with some areas in the northwest, western and northern parts of North China, Inner Mongolia, and central northern parts of Northeast China dropping by 6-8 ℃. There will be light to moderate snow and locally heavy snow in the eastern part of Northwest China, central and western Inner Mongolia, western Sichuan Plateau, and western North China. Strong winds, cooling temperatures, and snowfall can easily cause snow disasters and low-temperature freezing damage to facility agriculture and animal husbandry production, increasing the cost of cold prevention, insulation, and management.

Port inventory: North Port inventory increased month on month

As of the week of December 6th, the total corn inventory in the four northern ports was 4.462 million tons, an increase of 404000 tons compared to the previous week.

Last week, the price of corn at the port fell sharply. The market continues to decline, and the overall market sentiment is weak. The port volume remained high during the week, mainly consisting of contract grain.

Port inventory: Guangdong Port corn inventory increased month on month

As of the week of December 6th, the total inventory of corn in Guangdong Port's domestic and foreign trade was 938000 tons, an increase of 237000 tons compared to the previous week's 701000 tons. Among them, the domestic corn inventory in Guangdong Port totaled 899000 tons, an increase of 246000 tons from last week; The foreign trade inventory was 39000 tons, a decrease of 9000 tons from last week.

Feed demand: breeding profits have slightly declined

As of the week of December 6th, the average price of live pigs sold nationwide was 16.16 yuan/kg, a decrease of 0.25 yuan/kg from last week, a month on month decrease of 1.52%, and a year-on-year increase of 14.04%. In terms of breeding profits, the profit from self breeding and self raising was 172.31 yuan/head, while the profit from purchasing piglets was -47.1 yuan/head, indicating a decline in breeding profits.

Last week, pig prices continued to decline. On the supply side, there has been an increase in the phenomenon of some breeding enterprises reducing weight and rushing to sell. The pace of small and medium-sized pigs being slaughtered has accelerated during the week, while the number of large weight pigs has slightly increased. Due to the early slaughter of some large-scale factories in certain areas, prices have decreased; On the demand side, the temperature drop in the south during the week was limited, and there was weak follow-up on demand for terminals and cured sausages. The increase in enterprise operating rates was not as expected. The frozen goods market still lacks positive support. This week, we will focus on changes in the pace of group market sales, changes in consumption after the weather turns cooler, and adjustments to macro consumption policies.

Feed demand: Profit situation of poultry farming

As of the week ending December 6th, the weekly breeding profit for free range chickens was -1.67 yuan per chicken, compared to -1.58 yuan per chicken last week, a decrease of 0.09 yuan per chicken from the previous week. The weekly breeding profit of parent raised chickens was 1.38 yuan per chicken, compared to 1.62 yuan per chicken last week, a decrease of 0.24 yuan per chicken from last week. The weekly breeding profit for laying hens was 62.33 yuan per egg, an increase of 10.3 yuan per egg from last week.

Last week, there was a slight loss in broiler farming. As the price of live chickens continues to decline, the breeding industry is entering a loss making phase. Last week's slaughtered chickens corresponded to the high priced seedling chicken source in the early stage, and the comprehensive breeding cost remained at a high level of 3.84 yuan/jin. In terms of laying hens, the egg market has seen a strong upward trend. In the early stage, old chickens were sold out in a concentrated manner, easing market supply pressure. The market for powdered eggs saw good sales and led the way in gains. The industry's speculative sentiment has heated up, and egg prices have become the main trend this week. Due to the month on month increase in average price last week, the profit of egg chicken farming has also risen synchronously.

Feed enterprise inventory: inventory days increase month on month

As of the week ending December 6th, the average inventory of corn in sample feed enterprises was 29.86 days, an increase of 0.65 days from last week, a month on month increase of 2.23%, and a year-on-year decrease of 3.24%.

Industrial demand: Profit situation of corn starch processing enterprises

As of the week ending December 6th, the profit from deep processing of corn starch in Jilin was 115 yuan/ton, an increase of 23 yuan/ton from last week, while the profit from deep processing of corn starch in Shandong was 128 yuan/ton, a decrease of 6 yuan/ton from last week; The profit from deep processing of corn starch in Heilongjiang was 97 yuan/ton, a decrease of 6 yuan/ton from last week. The profit from deep processing of corn starch in Hebei was 216 yuan/ton, a decrease of 4 yuan/ton from last week.

Overall, the processing profits of major production areas in China are within the profit range. With the successive launch of new grains, the reduction in raw material costs has driven the improvement of corn starch profits.

Industrial demand: The operating rate of deep processing enterprises has increased month on month

As of the week of December 6th, the starch start-up rate of 66 enterprises was 70.64%, an increase of 1.28% compared to last week.

Recently, the overall supply of raw material corn has been loose, and the cost price advantage is obvious. In addition, the profit margin of starch production is still acceptable, and the operating rate of the corn starch industry continues to rise.

Industrial demand: The consumption of deep processing enterprises has increased month on month

As of the week ending December 6th, 126 major corn deep processing enterprises in China consumed a total of 1.3162 million tons of corn, an increase of 18800 tons compared to the previous week. Among them, corn starch processing enterprises consumed 702400 tons of corn, an increase of 9600 tons compared to last week; Amino acid enterprises consumed 209700 tons, an increase of 1200 tons compared to last week; Alcohol companies consumed 404000 tons, an increase of 8000 tons compared to last week.

Industrial demand: Corn inventory of deep processing enterprises increases month on month

As of the week of December 6th, the corn inventory of 96 deep processing enterprises was 4.002 million tons, an increase of 8.48%.

Last week, the inventory of corn deep processing enterprises continued to increase, and ports in the north and south continued to accumulate inventory. The bearish sentiment in the market intensified, and traders' enthusiasm for shipping increased. The arrival volume of deep processing goods increased compared to last week, and the recovery of enterprise inventory increased. The pace of grain sales among farmers in North China has accelerated, and traders have a lower willingness to store grain, actively shipping. The arrival volume in front of deep processing enterprises remains high, and inventory has increased.

Industrial demand: Downstream deep processing morning to vehicle volume increases month on month

As of the week of December 6th, Shandong's deep processing has accumulated 6658 vehicles, an increase of 1441 vehicles or 27.62% compared to the previous week's 5217 vehicles.

Last week, the number of vehicles in front of deep processing doors increased compared to the previous week. The reason is that the quality of corn is poor, the acceptance of feed is low, and the requirements for toxins in deep processing are relatively low. In addition, the current reluctance of farmers to sell is low, resulting in a large increase in quantity. Focus on the profit changes and weather conditions of deep processing enterprises in the future.

Starch demand: price situation of corn starch and by-products

As of the week of December 6th, the price of corn starch was 2860 yuan/ton, with a month on month decrease of -37 yuan; The price of corn germ meal was 1440 yuan/ton, unchanged from the previous month; Corn protein powder price is 3780 yuan/ton, month on month -90; The price of corn bran was 730 yuan/ton, unchanged from the previous month.

Last week, protein powder continued to remain weak, mainly affected by the continued decline in soybean meal prices, and the market mostly held a pessimistic attitude; In terms of fiber, the export orders of some regional enterprises were still acceptable last week, and the prices showed strong performance. At present, the overall market performance of corn by-products remains weak and stable, and it is difficult for prices to rise in the later stage.

Starch demand: downstream operating rate of corn starch

As of the week of December 6th, the operating rate of F55 fructose corn syrup was 50.58%, an increase of 3.32 percentage points compared to last week. Overall, beverage consumption is poor, and enterprise operating rates are still low. A small number of previously shut down enterprises have resumed production, and the overall level remains low; The operating rate of maltose syrup was 52.62%, a decrease of 1.01 percentage points compared to last week. The overall sales of maltose syrup still face pressure, and the production of enterprises is limited; The operating rate of corrugated paper was 64.32%, a decrease of 0.75% compared to last week; The operating rate of cardboard was 67.26%, an increase of 0.12% compared to last week.

Basis situation: corn spot price and basis trend

As of December 6th, the average spot price of corn was reported at 2127 yuan/ton, and the corn base price was reported at -59 yuan/ton.

In terms of basis, the corn basis fluctuated last week. The spot price of corn is mainly stable with little fluctuation; On the market side, the main corn contract fluctuated downwards, with a weekly decline of 3.42%, resulting in a fluctuating basis. It is expected that the market will continue to maintain a volatile trend this week, and the basis may continue to fluctuate weakly.

Price difference situation: Corn price difference situation

As of the week of December 6th, the price difference structure of corn futures is 2501 with a discount of 2505.

Due to the traditional peak period of grain sales before the Spring Festival, there will be a temporary oversupply of corn supply, which will suppress prices in recent months and lead to a decrease in price pressure. In May, the supply of new crops will decrease temporarily, and the supply pressure will relatively ease. Therefore, 2501 will be discounted by 2505. It is expected that the gap between January and May will approach the previous high level or continue to encounter obstacles and decline.

Alternative situation: The price difference between jade and wheat has slightly widened

As of December 6th, the average market price of wheat was 2440 yuan/ton, the average market price of corn was 2124 yuan/ton, and the price difference between wheat and corn was 316 yuan/ton, an increase of 27 yuan/ton compared to last week. The price difference between wheat and corn was greater than 250 yuan/ton, and there was basically no advantage for wheat to ｒｅｐｌａｃｅ corn.

Last week, wheat prices continued to decline, and market purchases and sales remained flat. Grain holders are generally bearish on the future market, actively selling grain to lock in profits, and ensuring sufficient circulation of grain sources in the market. Flour milling enterprises continue to operate at a low level, with limited wheat consumption, and a purchasing and selling mentality of low inventory and fixed procurement based on sales. The current demand for wheat is relatively single, and the advantage of feed substitution is not significant. Under the supply-demand game, the center of gravity of wheat prices continues to shift downwards.

Customs data shows that China's wheat imports in October were 210000 tons, a year-on-year decrease of about 66%; The total import volume of wheat from January to October was 10.82 million tons, an increase of about 1% year-on-year.

Balance sheet: New production expected to decrease, import volume to decrease year-on-year

As of December 6th, the corn balance sheet has not been significantly adjusted compared to the previous month, and the expected decrease in new production is still maintained, with a decrease of about 7.6 million tons. In addition, with the tightening of import corn policies, it is estimated that the import volume of corn for the new season will be reduced by 3 million tons. The overall supply and demand remain in a tight balance state, and the ending inventory has significantly decreased compared to last year, but still maintains a loose expectation.