Corn and starch futures prices fluctuate upwards

The performance of corn spot prices is differentiated, with many North China production areas experiencing a decline, while the Northeast production areas and ports in the north and south are steadily rising. The overall market price fluctuates upward, and all contracts have seen significant increases. For corn, the recent decline is quite similar to the logic of March May 2023, mainly due to the rapid accumulation of inventory in ports in the north and south, as well as the pressure of surplus grain from farmers. In theory, the increase in national reserves is expected to drive downstream entry into the market to resolve the pressure of new listings. However, specific policies and their implementation need to be noted, as the current futures price has once again turned to premium spot prices, and positive feedback from spot prices is still needed. This requires attention to the volume of vehicles arriving at the deep processing gate and the volume of port collections in northern ports. In summary, we hold a cautious bullish view and suggest that investors consider investing in long positions again.

The spot price of starch is stable with some decline, and the quotations of various Yihai series companies have been lowered by 20-50 yuan. The futures price of starch has fluctuated upwards with corn, and its performance is relatively weaker than that of corn. The price difference between starch and corn has slightly narrowed. For starch, the recent price difference between starch and corn has slightly widened after continuing to narrow, mainly due to the unlikely continued bearish trend of the three factors affecting the price difference. Considering the high starch base and the fact that most of the production profits in the market are at a loss, we tend to limit the space for narrowing the price difference between starch and corn. In this situation, based on the judgment of raw material corn, we hold a cautious bullish view and suggest that unilateral investors can consider intervening in long positions, while arbitrage investors continue to hold the starch corn price difference for further arbitrage.