The enthusiasm of CFT trading entities to build warehouses has increased, and there are signs of slowing down in the trend of corn price decline

1、 In terms of spot goods

Recently, new grain from major domestic production areas has been concentrated in the market, and some growers in certain areas have been reluctant to sell at low prices. The circulation of grassroots grain sources has significantly decreased, and the enthusiasm of trading entities to build warehouses has increased. Processing enterprises have raised prices for purchases, and the downward trend in prices has slowed down. The morning arrival volume of domestic northern ports is over 40000 tons, with an increase in the number of purchasing entities and a significant increase in port collection volume. Contract grain procurement is the main method, while order procurement is the main method and price cutting is the main method. Southern ports have obvious shipments and low inventory, supporting traders to stabilize their pricing mentality. The domestic spot price of corn is basically stable, with some fluctuations in some areas. The harvest area of new season corn in Northeast China is gradually expanding. During the peak period of new grain listing, new grain from Jilin and Heilongjiang provinces is gradually being listed for supply to the market. The number of processing enterprises opening scales is increasing, downstream demand is sluggish, and the willingness of enterprises to build warehouses is weak. Deep processing enterprises have received more grain at a low price, and some enterprises continue to lower prices. The harvest of new grain in the Huang Huai region of North China is coming to an end. Grassroots farmers have weak willingness to sell grain, and the market is sluggish. In addition, trade inventories remain low, and supply remains tight. The arrival volume of deep processing enterprises remains low, and the purchase prices of enterprises continue to rise.

2、 Futures related

On October 18, 2024, the CBOT December corn contract rose 2 cents to close at 406.75 cents per bushel. Due to the decline in the neighboring wheat market.

On October 21, 2024, the main contract c2501 for corn futures on the Dalian Commodity Exchange (DCE) opened at 2195 yuan and closed at 2170 yuan, a decrease of 20 yuan. The highest price was 2200 yuan, the lowest price was 2168 yuan, and the settlement price was 2179 yuan. The total trading volume was 480565 lots, with 797102 lots held.

3、 Focus on hot topics in the later stage

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.

4、 Related news

1. As of the week of October 10, 2024, the net sales volume of corn in the United States for 2024/25 was 2225700 tons, which was 82% higher than the previous week and significantly higher than the four week average.

2. The Russian Grain Exportersｕｎｉｏｎstated that Russian exporters will directly supply grain to 13 countries without going through foreign intermediaries. This decision applies to transactions concluded after October 11th, and transactions previously concluded will be executed according to the agreed terms.

3. IGC maintains its forecast for global corn production unchanged this month at 1.224 billion tons, with slight increases in corn production in the United States and India, but weakened prospects for corn production in Russia and Egypt.

4. Private meteorological agency RuralClima stated that most parts of Brazil have experienced increased rainfall this week, except for Matopiba.

5. According to Chinese customs data, the import volume of corn in China in September was 310000 tons, a year-on-year decrease of 81%. The total import volume of corn from January to September 2024 was 12.83 million tons, a year-on-year decrease of 22.5%.

6. One of Taiwan's feed raw material procurement groups, MFIG, has purchased approximately 65000 tons of feed corn through international bidding and is expected to source it from Brazil.

7. The Buenos Aires Grain Exchange (BAGE) reported that as of October 16, the progress of corn planting in Argentina for 2024/25 reached 24.3%, higher than 18.5% a week ago and 4.4% higher than the same period last year.

8. The US Department of Agriculture stated that private exporters reported selling 125000 tons of US corn to unknown destinations for delivery in 2024/25.

9. The Ukrainian Ministry of Agriculture stated that as of October 17th, Ukraine has harvested approximately 42.8 million tons of grain, equivalent to 84.8% of the planned harvest area of 11.116 million hectares.

10. As of October 13th, the grain exports of the 27 EU countries in 2024/25 (starting from July 1st) amounted to 9656747 tons, a decrease of 29% compared to the same period last year and a decrease of 28% compared to the same period last week.

11. As of October 13th, the grain imports of the 27 EU countries in 2024/25 (starting from July 1st) amounted to 9066575 tons, a decrease of 7% compared to the same period last year and a decrease of 6% year-on-year last week.

12. On October 21st, China Grain Reserves Network announced the bidding results for corn procurement by China Grain Reserves Storage and Transportation Company: the planned purchase of 11150 tons of corn, with a transaction quantity of 11150 tons and a transaction rate of 100%.

13. On October 21st, China Grain Reserves Corporation Chengdu Branch's corn bidding procurement results showed that 7303 tons of corn were planned to be purchased, with a transaction quantity of 1023 tons and a transaction rate of 14%.

14. On October 21st, China Grain Reserves Corporation's corn bidding sales results showed that the planned sales of corn were 9383 tons, with a transaction quantity of 9383 tons and a transaction rate of 100%.

15. On October 21st, China Grain Reserves Corporation Inner Mongolia Branch's corn bidding sales results showed that 23360 tons of corn were planned to be sold, with a transaction quantity of 6074 tons and a transaction rate of 26%.

16. On October 21st, China Grain Reserves Corporation Liaoning Branch's corn bidding sales results showed that the planned sales volume was 11743 tons of corn, with a transaction quantity of 7751 tons and a transaction rate of 66%.

17. On October 21st, China Grain Reserves Corporation Beijing Branch conducted a two-way corn purchase and sale transaction, with a planned trading volume of 12606 tons and a trading volume of 2000 tons, resulting in a trading rate of 16%.

5、 Market analysis in the future

In October, 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 increase due to the high operating rate, and the total consumption will continue to grow overall. Overall, the supply of aged corn in China will continue to be in a period of shortage during October. On the other hand, the harvest and listing of new season corn in North China, East China, and Central China continue to increase. In the second half of October, corn in the main production areas of Northeast China will gradually enter the harvesting stage, and the market will enter the stage of transition from old to new crops. The pressure of new crops will be further highlighted. In terms of planting and production, due to the heavy rainfall and severe waterlogging in the main corn producing areas in the north this year compared to last year, the expected decrease in yield and production reduction in the main corn producing areas in the northeast is higher than the official expectation. Farmers have both pessimistic and optimistic expectations for the market trend. The weather forecast shows that the early frost time this year will be delayed by about 10 days compared to previous years, which is conducive to harvesting and drying. Due to the high moisture content of new season corn in the main production areas of Northeast China, it is temporarily unable to enter the feed market. Therefore, during most of October, the supply of feed corn will still rely on aged corn as the main source. However, the transfer of grain sources from deep processing enterprises to new season high moisture corn is conducive to alleviating the competition with feed corn in the "grain grabbing" process. Taking into account various factors, we believe that in October, except for temporary short-term rebound opportunities in some local markets, most of the time the market transaction prices in most regions will continue to maintain a weak trend, and there is a greater possibility of continued weak fluctuations and adjustments in the bottom range. The probability of the monthly average price of corn in October in production areas continuing to decline month on month and the decline still being significantly high is still high. In November, as the harvest gradually comes to an end and the expected reduction in production is gradually confirmed, coupled with the significant decrease in imported corn and substitute imports, the probability of a moderate rebound in corn prices in production areas is expected to increase moderately. Pay close attention to the impact of weather conditions during the harvest season.