CFT weather causes local surplus grain outflow to slow down, corn continues to rebound at a low level

1、 In terms of spot goods

Some traders in the main production areas of China who are under financial pressure continue to clear their inventory, and the continuous rainy weather in some areas has slowed down the speed of surplus grain outflow. Traders have reduced their shipments, and the amount of goods received in front of processing enterprises continues to decrease, resulting in a slight increase in purchase prices. Most traders from Northeast China ship to deep processing and breeding enterprises. The morning collection volume of northern ports is less than 2000 tons, and the arrival of goods is still mainly self collected by enterprises. The immediate trade profits of North and South ports continue to invert, and the reduced shipping demand of trade enterprises has weakened their willingness to purchase. Some traders have stopped receiving, and the basic collection of second-class grains has been suspended. The speed of shipment is still relatively slow. The enthusiasm of feed enterprises in southern ports to replenish inventory is poor, and the purchasing sentiment of corn is not high. The quotes from traders are relatively stable. The clearance of foreign trade corn inventory has significantly accelerated, while the total import volume of sorghum and barley decreased in August, and the pressure on imported grain supply may further decrease in the future. The domestic spot price of corn is basically stable, with slight increases in some areas. The continuous decline in corn prices in the Northeast region has compressed the profit margins of traders, resulting in a decrease in shipping intentions. Some traders with financial pressure are still selling corn. In some areas, rainfall has affected corn purchase and sales activities, and the deterioration of starch processing profits has suppressed the increase in operating rates. Starch enterprises have high inventory of raw materials and finished products, and deep processing enterprises have insufficient demand for large-scale procurement. The number of live pigs in stock is low, and there is a large inventory of substitute products. The strength of boosting feed consumption is limited, and grain enterprises continue to adopt price cutting measures. The continuous rainy and cloudy weather in the Huanghuai production area of North China is inconvenient for transportation, which is unfavorable for grassroots corn purchase and sales activities. The amount of corn sold has significantly decreased compared to the previous period. In addition, the import of grain from Northeast China is not smooth, and the market supply is slightly tight. The amount of corn received by deep processing enterprises continues to decrease, and some enterprises have slightly raised the purchase price of corn.

2、 Futures related

On August 20, 2024, the CBOT December corn contract closed 2.25 cents lower at 398 cents per bushel. The investigation results show that the yield per unit is higher than the average.

On August 21, 2024, the main contract c2411 for corn futures on the Dalian Commodity Exchange (DCE) opened at 2288 yuan and closed at 2303 yuan, an increase of 17 yuan. The highest price was 2303 yuan and the lowest price was 2283 yuan, with a settlement price of 2290 yuan. The total trading volume was 362740 lots, with 642460 lots held.

3、 Focus on hot topics in the later stage

4、 Related news

1. The Brazilian National Commodity Supply Company (CONAB) stated that as of August 18th, the progress of the first season corn harvest in 2023/24 was 100%, compared to 99.8% a week ago and 100% in the same period last year. The progress of the second season corn harvest in Brazil is 96.4%, 94.7% last week, and 78.8% in the same period last year.

2. The Ukrainian Grain Association (UGA) announced on Tuesday that Ukraine's total exports of grains and oilseeds from August 1st to 15th amounted to 2.48 million tons, a 26% increase from 1.97 million tons in the same period in July.

3. At present, the Russian Ministry of Agriculture continues to maintain its production forecast unchanged, which is 132 million tons of grain production, including 86 million tons of wheat. However, as the harvest approaches its end, the wheat production forecast may be lowered.

4. As of August 18th, in 18 states that account for 92% of the country's corn planting area, the silk emergence rate of corn in the United States is 97%, with a five-year average of 98%. The proportion of cooked period is 74%, which is higher than the five-year average of 71%. The proportion of concave grain period is 30%, which is higher than the five-year average of 26%.

5. On August 21st, China Grain Reserves Corporation Chengdu Branch's corn bidding sales results showed that they planned to sell 1192 tons of corn, with a transaction quantity of 1192 tons and a transaction rate of 100%.

5、 Market analysis in the future

In August, the inventory of aged corn in China will continue to decline, and the total consumption of corn on the demand side of breeding and feed production will continue to increase month on month. The consumption of deep processing sector will continue to be low, and the total consumption will continue to increase overall. Overall, the general trend of further tightening of domestic aged corn supply during August remains unchanged, and theoretically, both the supply and demand sides will provide favorable support for prices. On the other hand, spring corn is sporadically listed in the southern region, and the tight supply of aged corn has eased to some extent. Due to the combination of overdue reserves of alternative raw materials such as corn, wheat, and rice being auctioned off and listed, as well as the effective supply of imported corn substitutes, the overall corn supply remains sufficient and relatively loose. At the same time, this year's corn production areas have abundant rainfall and overall good soil moisture. The speculation window for weather topics in futures and spot markets is relatively narrow. In addition, the continuous decline in demand for pig farming is also limiting the increase in corn consumption. Therefore, the negative factors in the market are also significant. Taking into account the impact of multiple factors, we predict that the probability of overall weak corn prices during the period of August to October is higher. However, there is still a chance for the downward trend to slow down and there to be a temporary rebound during the second half of August to the first half of September. We are highly concerned about the impact of weather conditions in the later stage on the growth of corn in the production area.

Changes in weather, purchasing mentality, feed mill strategy, domestic policies, international and domestic corn markets, purchasing situation in production areas, arrival of imported corn at ports, epidemic situation, livestock and poultry product market, changes in international freight rates, international economic situation, changes in wheat prices, feed demand, and the impact of weather on corn.