pointblankarcade| When will the corn market go smoothly with such contradictions?

Source: Legend of Lianghu

The current corn market is quite peculiar and full of contradictions.

The purchase price of deep processing enterprises in Suihua area of Heilongjiang is 2,290 - 2,320 yuan/ton, and the purchase price of deep processing enterprises in southern Shandong is 2,250 - 2,294 yuan/ton. The price in southern Shandong is even 30-40 yuan/ton cheaper than Suihua, Heilongjiang.

The closing price of second-class corn in Beigang is 2,400 - 2,420 yuan/ton, and the purchase price is 2,390 - 2,410 yuan/ton, which is almost the same. The corn price in southern ports is 2,460 - 2,480 yuan/ton, which is only about 40-60 yuan/ton more expensive than the corn purchase price in Beigang. Beigang's corn stocks are 4.3 million tons, which is similar to last year's peak, while southern ports 'energy grain stocks are 500,000 to 700,000 tons more than the same period last year, and domestic corn demand is weak. However, Beigang still raises prices to collect grain despite high inventories.

The strange corn market, what exactly?pointblankarcadeDid you? When will things go smoothly?

First of all, many people say that there is a serious outflow of corn in Northeast China and that the production areas are running out of food. In response to this problem, the author has conducted various understandings: 1. Currently, North China feed mills mainly use local corn, and most of them do not purchase Northeast corn; it is impossible for North China deep processing enterprises to receive Northeast corn; at present, a large amount of Northeast corn flows into North China, and basically it is impossible. Including freight costs, Shandong may have to increase by about 250 yuan/ton to attract Northeast corn. 2. Since March, a total of less than 7 million tons of corn has been collected in the northeastern production area, of which about 1 million tons have been collected in the port so far in May, and about 2.6 million in April. In April and May, the production areas sent to Beigang Grain delivery, showing a very slow state. 3. In the southern region, there is not only a supply of low-cost corn from North China, but also imported sorghum and barley. As a result, the outflow of corn in Northeast China from April to May is quite limited.

Secondly, this year, the corn purchases by terminal enterprises in northeastern production areas decreased year-on-year, and the increased reserves of policy grain also decreased by about 3 million tons compared with the previous year. This year's corn output is about 8 million tons more than the previous year. The performance of outbound traffic was also not ideal. Except for the early period when Liaoning corn just went on the market and flowed out to Hebei, and the excessive harvest of northeastern corn along the Yangtze River from November to December due to restrictions on the release of imported corn, the rest of the time was affected by corn moisture and freight. The increase in outbound traffic of northeastern corn this year was relatively limited compared with last year. Therefore, it is impossible for the production area to run out of food.

Comprehensive analysis shows that corn in Northeast China has risen in the short term, but it cannot flow out, and the momentum for continued rise is limited. In North China and southern regions, prices will not be raised until mid-June to collect Northeast corn, and Northeast corn may flow out from the end of June to mid-to-late July to supply large quantities to other sales areas. Therefore, although corn prices in Northeast China are firm in the short term, they are only replenished by regional terminal enterprises. For the rest of the time, there is price but no market. The market will really improve. We need to wait for corn in North China to rise for some time. After the corn prices in the north and south are repaired, there is a high probability that it will be in mid-to-late June. July.