Corn: Running in Divergence

Core viewpoint: According to the neutral Ukrainian Ministry of Agriculture, Ukraine's grain exports so far this year have reached 15.95 million tons, an increase of nearly 5 million tons compared to the same period last year. Among them, the export volume of corn is about 5.73 million tons, higher than the 4.87 million tons in the same period last year. Last week, the temperature anomaly in the main corn producing areas of Brazil was relatively high, with little change in 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 48.7%, which was faster than the previous year. The crop progress report released by the US Department of Agriculture shows that as of November 15th, the progress of corn harvest in the United States is 95%, up from 91% last week and 86% in the same period last year.

Last week, the price center of the national corn market continued to shift downwards, with a weekly average price of 2164 yuan/ton, a decrease of 16 yuan/ton compared to the previous week. The temperature in Northeast China is relatively high and often rainy, making it difficult to store damp grains. Some grain sources have heating problems, increasing the risk of mold growth. Grassroots grain sales are more active, and there is an increase in the arrival of goods in front of deep processing enterprises. Short term rainy weather has occurred in some areas of North China, but it has not affected the yield of corn. The amount of goods received in front of deep processing doors remains high, but enterprises only maintain on-demand procurement, and the price focus has shifted downwards. The price of corn in the sales area fluctuates weakly. In coastal areas, there is a concentration of ships arriving at ports, and downstream enterprises execute contracts to pick up goods, slightly easing the shortage of spot goods.

Last week, pig prices continued to decline and the decline widened. On the supply side, pig prices fluctuated within the week, and expectations for the future market in the breeding side decreased. From the perspective of small and medium-sized farms, the price difference between standard fertilizers continues to narrow. In addition, with stricter transportation policies, the flow of large pigs in the south is not smooth; On the demand side, there was a surplus of raw material supply during the week, coupled with sporadic increases in cured meat orders, resulting in a slight increase in seasonal demand, which continued to drive up the operating rate of enterprises. The demand for frozen products in the market remains flat, and downstream traders have a low willingness to stock up. It is expected that the overall trend will fluctuate weakly this week, and the center of gravity of the average price will shift downwards. 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 weakly last week, hitting a low of 2179 yuan/ton. On the one hand, the quantity of tidal grain in Northeast China is continuously increasing, and the supply is temporarily loose; On the other hand, there is no new news guidance for macro policies, and the market is in a state of no obvious positive news. A slight weakening of macro sentiment will bring temporary selling pressure to the market. Therefore, overall, the 2501 contract showed a fluctuating and weak trend last week. This week, we need to focus on the acquisition prices of deep processing enterprises and the situation of grassroots volume, pay attention to the release of incremental policies, and pay attention to the progress of grassroots grain sales and weather changes in the future.

Origin: According to the Ukrainian Ministry of Agriculture, Ukraine's grain exports so far this year have reached 15.95 million tons, an increase of nearly 5 million tons compared to the same period last year. Among them, the export volume of corn is about 5.73 million tons, higher than the 4.87 million tons in the same period last year. Last week, the temperature anomaly in the main corn producing areas of Brazil was relatively high, with little change in 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 48.7%, which was faster than the previous year. The crop progress report released by the US Department of Agriculture shows that as of November 15th, the progress of corn harvest in the United States is 95%, up from 91% last week and 86% in the same period last year.

Domestic supply: Neutral. Last week, the price center of the national corn market continued to shift downwards, with a weekly average price of 2164 yuan/ton, a decrease of 16 yuan/ton compared to the previous week. The temperature in Northeast China is relatively high and often rainy, making it difficult to store damp grains. Some grain sources have heating problems, increasing the risk of mold growth. Grassroots grain sales are more active, and there is an increase in the arrival of goods in front of deep processing enterprises. Short term rainy weather has occurred in some areas of North China, but it has not affected the yield of corn. The amount of goods received in front of deep processing doors remains high, but enterprises only maintain on-demand procurement, and the price focus has shifted downwards. The price of corn in the sales area fluctuates weakly. In coastal areas, there is a concentration of ships arriving at ports, and downstream enterprises execute contracts to pick up goods, slightly easing the shortage of spot goods.

Feed demand: bearish. Last week, pig prices continued to decline and the decline widened. On the supply side, pig prices fluctuated within the week, and expectations for the future market in the breeding side decreased. From the perspective of small and medium-sized farms, the price difference between standard fertilizers continues to narrow. In addition, with stricter transportation policies, the flow of large pigs in the south is not smooth; On the demand side, there was a surplus of raw material supply during the week, coupled with sporadic increases in cured meat orders, resulting in a slight increase in seasonal demand, which continued to drive up the operating rate of enterprises. The demand for frozen products in the market remains flat, and downstream traders have a low willingness to stock up. It is expected that the overall trend will fluctuate weakly this week, and the center of gravity of the average price will shift downwards.

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 302 yuan/ton between jade and wheat. Wheat replacing corn no longer has a price advantage.

Weather situation: Neutral. It is expected that strong cold air will continue to affect the central and eastern regions on the 18th of this week, causing widespread precipitation and strong winds to cool down. The lowest temperature line of 0 ℃ will be pushed southward to the southern part of Shanxi and the central part of Hebei. There will be a strong cold air affecting China around the 24th, with strong winds, cooling temperatures, rain and snow weather that is unfavorable for facility agriculture production and will also have a significant impact on logistics transportation.

Foreign origin situation

United States: Corn Export Situation

On the week of November 15th, the net sales of corn exports from the United States for 2024/2025 were 1.315 million tons, a decrease of 1.451 million tons compared to the previous week's 2.766 million tons; The total export volume of US corn is 8.37 million tons, with an outstanding sales volume of 21.531 million tons.

US: Situation of US corn exports to China

During the week of November 15th, the United States shipped 699000 tons of 2024/2025 corn exports, compared to 918000 tons the previous week; The United States shipped 0 million tons of corn to China (mainland region) and 0 million tons to China last week, the same month on month, with a cumulative sales volume of 25000 tons to China.

US: US Corn Fund net short to long

As of the week ending November 15th, the long position of US corn was 273200 lots, an increase of 28900 lots compared to the previous week; Short positions of 251200 lots decreased by 10800 lots compared to last week.

As of the week ending November 15th, the net long position was 3000 lots, an increase of 38000 lots compared to the previous week, indicating an increase in long willingness. The lowest price of the CBOT corn main contract this week was 417.0 cents per bushel, and the highest price was 433.5 cents per bushel.

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

During the week of November 15th, the temperature anomaly in the main corn producing areas of Brazil remained relatively stable compared to previous years, with more precipitation in the central and southern regions 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 November 15th, the progress of planting corn for the 2024-2025 crop year was 48.7%, 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 73.1%, the germination stage accounts for 12.1%, and the flowering part accounts for 9.6%.

Brazil: Weekly corn exports decrease month on month

According to Anec Brazil's latest estimate, Brazil's corn exports from November 10th to November 16th amounted to 1.2375 million tons, compared to 1.2779 million tons last week, a decrease of 40400 tons compared to the previous week.

As of November 15th, according to Anec Brazil's latest estimate, Brazil's corn exports are expected to reach 5.3767 million tons in November, down from 6.9959 million tons in the same month last year, a year-on-year decrease of 1.6191 million tons.

As of this week, Brazil's cumulative export of corn from January to October 2024 was 29.15 million tons, a decrease of 10.592 million tons or 30.76% compared to the export of 42.105 million tons from January to October last year.

Import cost: Brazil has a slight advantage in corn imports

As of November 15th, the arrival cost of Brazilian corn imported within China's quota in November for the second half of the year is around 2086 yuan/ton, and the arrival cost of Meiwan corn in November is around 2131 yuan/ton; The arrival cost of the November shipment of corn from the western United States is around 2098 yuan/ton; The transaction price of bulk grain at Shekou Port is 2260 yuan/ton, with a slight advantage in the import of Brazilian corn in the distant months.

Domestic supply and demand situation

Weather: Pay attention to cooling and snowfall weather

As of the week of November 15th, temperatures in most agricultural areas across the country were 2-6 ℃ higher than the same period in previous years, with temperatures in central Inner Mongolia, central and southern Northeast China, and northern Hebei being 6-8 ℃ higher; The precipitation in northern Xinjiang, northeastern Inner Mongolia, eastern and southern Northeast China, eastern Northwest China, and northern China ranges from 5 to 50 millimeters. Last week, temperatures in most parts of Inner Mongolia, central and western Heilongjiang, and western Jilin were 2-8 ℃ higher, with less precipitation and normal sunlight, which is conducive to the drying and storage of autumn grain.

It is expected that on the 18th of this week, the central and eastern regions will experience widespread precipitation and strong winds to cool down due to the continued impact of strong cold air. The lowest temperature line of 0 ℃ will be pushed southward to the southern part of Shanxi and the central part of Hebei. There will be a strong cold air affecting China around the 24th, with strong winds, cooling temperatures, rain and snow weather that is unfavorable for facility agriculture production and will also have a significant impact on logistics transportation.

Port inventory: North Port inventory increased month on month

As of the week of November 15th, the total corn inventory in the four northern ports was 2.763 million tons, an increase of 298000 tons compared to the previous week.

Last week, the price of corn at the port was weak. The port arrival volume slightly decreased during the week, but remained at a high level. The temperature in the production area is high and often rainy, making it difficult to store damp grains and resulting in concentrated quantities.

Port inventory: Guangdong Port corn inventory increased month on month

As of the week of November 15th, the total inventory of corn in Guangdong Port's domestic and foreign trade was 393000 tons, an increase of 67000 tons compared to last week's 326000 tons. Among them, the domestic corn inventory in Guangdong Port totaled 326000 tons, an increase of 77000 tons from last week; The foreign trade inventory was 67000 tons, a decrease of 10000 tons from last week.

Feed demand: breeding profits continue to decline

As of the week of November 15th, the average price of live pigs sold nationwide was 16.61 yuan/kg, a decrease of 0.53 yuan/kg from last week, a month on month decrease of 3.09%, and a year-on-year increase of 15.19%. In terms of breeding profits, the profit from self breeding and self raising was 206.53 yuan/head, while the profit from purchasing piglets was -43.56 yuan/head, indicating a continued decline in breeding profits.

Last week, pig prices continued to decline and the decline widened. On the supply side, pig prices fluctuated within the week, and expectations for the future market in the breeding side decreased. From the perspective of small and medium-sized farms, the price difference between standard fertilizers continues to narrow. In addition, with stricter transportation policies, the flow of large pigs in the south is not smooth; On the demand side, there was a surplus of raw material supply during the week, coupled with sporadic increases in cured meat orders, resulting in a slight increase in seasonal demand, which continued to drive up the operating rate of enterprises. The demand for frozen products in the market remains flat, and downstream traders have a low willingness to stock up. It is expected that the overall trend will fluctuate weakly this week, and the center of gravity of the average price will shift downwards.

Feed demand: Profit situation of poultry farming

As of the week ending November 15th, the weekly breeding profit for free range chickens was -1.18 yuan per chicken, compared to -1.15 yuan per chicken last week, a decrease of 0.03 yuan per chicken from the previous week. The weekly breeding profit of parent raised chickens was 1.45 yuan per chicken, compared to 1.47 yuan per chicken last week, a decrease of 0.02 yuan per chicken from last week. The weekly breeding profit of laying hens was 55.25 yuan/egg, a decrease of 4.64 yuan/egg from last week.

Last week, broiler farming still made a slight profit, but the profit margin rapidly shrank, and by the end of the week, it had reached the break even point. During the week, the finished feed of Shandong broiler chickens increased by 50.00 yuan/ton, and the cost of chicken seedlings gradually reached its highest stage, with an average weekly price of 3.91 yuan/feather. In terms of laying hens, the market for eggs (3976, -26.00, -0.65%) rose first and then fell during the week. At the beginning of the week, the demand in sales areas was still strong due to the boost of "Double 11", which drove local production areas to strengthen. The terminal demand weakened in the second half of the week, with significant inventory backlog in various links, and the pressure on egg prices weakened. Due to the ｄｒｏｐ in egg prices this week, the profits from laying chicken farming have also decreased.

Feed enterprise inventory: inventory days increase month on month

As of the week ending November 15th, the average inventory of corn in sample feed enterprises was 29.14 days, an increase of 0.58 days from last week, a month on month increase of 2.02%, and a year-on-year decrease of 3.22%.

Industrial demand: Profit situation of corn starch processing enterprises

As of the week ending November 15th, the profit from deep processing of corn starch in Jilin was 100 yuan/ton, up 57 yuan/ton from last week, while the profit from deep processing of corn starch in Shandong was 193 yuan/ton, up 68 yuan/ton from last week; The profit from deep processing of corn starch in Heilongjiang was 144 yuan/ton, an increase of 49 yuan/ton from last week. The profit from deep processing of corn starch in Hebei was 255 yuan/ton, an increase of 56 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.

Data source: Zijin Tianfeng Futures Research Institute Industrial demand: The operating rate of deep processing enterprises has increased month on month

As of the week of November 15th, the starch start-up rate of 66 enterprises was 69.26%, an increase of 1.35% compared to last week.

Recently, due to local environmental impacts, some provinces have experienced a decrease in operating capacity, while most enterprises are operating at full capacity with the support of good profits.

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

As of the week ending November 15th, 126 major corn deep processing enterprises in China have consumed a total of 1.2674 million tons of corn, an increase of 0.30 million tons compared to the previous week. Among them, corn starch processing enterprises consumed 692100 tons of corn, an increase of 8100 tons compared to last week; Amino acid enterprises consumed 213100 tons, unchanged from last week; Alcohol companies consumed 362200 tons, a decrease of 5100 tons compared to last week.

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

As of the week of November 15th, the corn inventory of 96 deep processing enterprises was 3.563 million tons, an increase of 6.49% compared to last week.

Last week, the inventory level of corn deep processing enterprises increased, but the growth rate was limited. The Northeast region is affected by the high temperature and difficulty in preservation, resulting in a faster pace of grain sales by farmers and a larger market supply. As a result, the inventory of deep processing has rebounded. The enthusiasm of traders in the North China production area for shipment is still good, downstream manufacturers purchase according to demand, prices are weak, and inventory levels have rebounded.

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

As of the week of November 15th, the total number of vehicles processed by Shandong's deep processing industry reached 4155, a decrease of 1915 vehicles or 31.54% compared to the previous week's 6070 vehicles.

Last week, the number of vehicles in front of the deep processing doors decreased compared to the previous week. The reason is that deep processing enterprises continued to decline in purchase prices due to an increase in the number of vehicles arriving last week, and the shipping pace of traders slowed down. In addition, in some areas, logistics transportation was affected due to weather and other factors, resulting in a decrease in the number of vehicles arriving. Focus on the profit changes and vehicle delivery volume of deep processing enterprises in the future.

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

As of the week ending November 15th, the price of corn starch was 2910 yuan/ton, unchanged from the previous month; The price of corn germ meal is 1450 yuan/ton, up 20 yuan/ton month on month; The price of corn protein powder is 4200 yuan/ton, an increase of 270 yuan/ton compared to the previous period; The price of corn bran is 700 yuan/ton, unchanged from the previous month.

Last week, the market sentiment was not high, and soybean meal prices began to rebound at a high level, coupled with sluggish demand. The trading side continued to have low enthusiasm for follow-up orders, and downstream feed companies urgently needed to replenish their inventory. There were few new orders signed, and the mentality of enterprises to raise prices was unsuccessful. Some began to loosen. It is expected that there will still be no bright spots in the market this week, and prices will remain stable with weak adjustments.

Starch demand: downstream operating rate of corn starch

As of the week of November 15th, the operating rate of F55 fruit glucose syrup was 42.41%, an increase of 0.15 percentage points compared to last week. Overall, the operating rate of fruit glucose syrup has been fluctuating at a low level recently, with poor sales and many shutdowns and production restrictions; The operating rate of maltose syrup was 53.86%, a decrease of 0.49 percentage points compared to last week. Downstream procurement was average, and enterprises limited production; The operating rate of corrugated paper was 62.88%, a decrease of 0.6% compared to last week; The operating rate of cardboard was 66.57%, a decrease of 1.14% compared to last week.

Basis situation: corn spot price and basis trend

As of November 15th, the average spot price of corn was reported at 2156 yuan/ton, and the basis price of corn was reported at -35 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, with a weekly decline of 1.31%, 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 November 15th, 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 November 15th, the average market price of wheat was 2458 yuan/ton, the average market price of corn was 2156 yuan/ton, and the price difference between wheat and corn was 302 yuan/ton, an increase of 14 yuan/ton compared to last week. The price difference between jade and wheat was greater than 250 yuan/ton, and wheat had no advantage in replacing corn.

Last week, wheat prices remained stable with a slight decline, and the market was cautious in purchasing and selling. In terms of supply, the enthusiasm of grain merchants to sell grain is still good, coupled with the auction of China National Grain Reserves Corporation, the circulation of grain sources in the market is sufficient. In terms of demand, after the weather turns cooler, the increase in flour demand is not significant, and the profits of flour enterprises are meager. Wheat is still mainly purchased on demand. Wheat prices fluctuate and adjust under the game of supply and demand.

According to customs data, China's wheat imports in September were 230000 tons, a year-on-year decrease of about 60%; The total import volume of wheat from January to September was 10.61 million tons, an increase of about 5% year-on-year.

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

As of November 15th, 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, and the overall supply and demand will remain in a tight balance state. The ending inventory has significantly decreased compared to last year, but still maintains a loose expectation.