Temporary storage corn auctioned early, corn competitive bidding sales start ahead of schedule
On April 9, the competitive sales of state temporary storage imported corn and state temporary storage corn began again. This is the second launch after the conclusion of the temporary storage corn auction in early January this year, more than a month earlier than the launch of last year's state policy corn auction.
According to reporters' understanding, the planned auction volume of corn this time was about 320,000 tons, consisting of temporary storage corn and imported corn, including 43,000 tons in Anhui, 144,800 tons in Jiangxi, 123,900 tons in Hubei, and 5,800 tons in Hunan. This early auction of temporary storage corn can be said to have stirred up a thousand waves with one stone.
"As of now, the state has temporarily purchased about 80 million tons of 2014-produced corn in Northeast China, an increase of about 15 million tons over the same period last year, which has caused market supply to tighten and corn prices in some areas to rise noticeably." Henan corn trader Cui Bing told the Futures Daily reporter that if temporary storage corn is not released from warehouses in time, the market is very likely to see a sharp short-term price increase like the same period last year, which would put greater cost pressure on downstream demand enterprises. The early entry of temporary storage corn into the market is meant to ease the tight market supply situation and also to keep market prices running steadily.
Market participants believe that at present, temporary storage corn inventories are already very large, and at the same time, with the purchase and storage policy dominating the market, domestic corn purchasing and sales activities have been greatly affected. The early entry of temporary storage corn into the market will stabilize market prices, and the room for individual buyers, intermediate traders and demand enterprises to conduct business operations based on price fluctuations will also shrink accordingly. With supply fully guaranteed, all market entities will act around the auction of temporary storage corn.
Hebei corn trader Liu Shuwei told reporters that after learning the news of temporary storage corn entering the market, he stopped purchasing corn, mainly out of worry that the corn he bought would not be sellable. It is understood that temporary storage corn inventory points are scattered across the country. In addition to Northeast China, other parts of the country also store large amounts of Northeast-produced temporary storage corn transferred across provinces, part of which was produced in 2013. Considering that quality may decline after long storage, this corn could be released from warehouses in large quantities at any time, and once released, market prices will certainly come under pressure and decline.
According to Cui Bing, because regular auctions of temporary storage corn ensure supply, many demand enterprises also no longer store large amounts of corn. "Some feed enterprises and corn deep-processing enterprises have very little working inventory, and their production raw materials are mainly purchased temporary storage corn, which makes corn traders dare not act rashly."