What were the corn price trends and the factors affecting the market in February 2017?

At present, farmer friends are still in the festive mood of the Chinese New Year. Before the holiday, corn prices fell all the way, then rebounded slightly near the Spring Festival. So what direction will prices move in February 2017?

1. Main factors affecting the market:

1. Time factor

The Lantern Festival falls around the 10th of February, so there is little time available for operations in February, and time is tight.

2. Policy factor

Pay attention to the intensity of state stockpiling purchases in Northeast China after the Spring Festival. If monthly purchases exceed 15 million tons, this will support corn prices; if they fall below 10 million tons, corn prices will come under pressure.

3. As of January 15, the three northeastern provinces and one region had purchased a cumulative total of 52.5 million tons of corn, of which: Inner Mongolia purchased 7.19 million tons, Liaoning 11.26 million tons, Jilin 13.26 million tons, and Heilongjiang 20.79 million tons. Farmers still have about 50 million tons of corn on hand, and inventory pressure is heavy.

4. Before the holiday, feed enterprises generally stock up for about one month, and after the holiday they will not immediately make large-scale purchases, which squeezes the corn market.

5. Corn deep-processing enterprises have high profits and high operating rates. Focus on the operating rates of starch plants and alcohol plants in the Shandong region. This year, deep-processing enterprises have high profit margins, providing slight support for corn prices.

6. Logistics bottlenecks. During the Spring Festival travel rush, will logistics become further strained, with railway services suspended and road transport reduced, and will this further drive up logistics costs?

2. Corn price assessment:

1. Northeast region:

Jilin corn prices are 0.64--0.68 yuan/jin, Heilongjiang 0.58--0.65 yuan/jin, and the Liaoning region 0.67--0.73 yuan (dry corn, based on 14% moisture, second-grade grain standard). After the Lantern Festival, prices will rise slightly, but the room for gains will not be too large. Farmer friends who have grain on hand should pay attention to the pace of selling.

2. Shandong region:

As for deep-processing enterprises, starch plants are expected to hover between 1560--1660, with deep-processing purchase prices for Northeast dried corn on the low side and prices for naturally sun-dried corn on the high side. Feed enterprise purchase prices in the Shandong region will be between 1680--1750.

3. North and South ports:

Purchase prices at northern ports are 1450--1500 yuan/ton, with closing prices at 1520 yuan/ton; purchasing is not active, and the downward momentum of the market has been released. Export prices at Guangdong ports are 1620 yuan/ton, and shipments are not active.

Overall, the market will not have much room for major fluctuations. The Northeast region will see slight increases, and in the Shandong region, high-quality corn and naturally air-dried corn are in short supply.