Corn temporary storage purchase accelerates, grassroots grain prices rise accordingly

I. Spot market

Northeast production area: temporary storage accelerates, grassroots grain prices rise

The temporary storage purchase efforts in the Northeast production area have strengthened again. According to the latest data, purchases in the past 5 days have reached 6.62 million tons, and total purchases have exceeded 45 million tons. With the help of accelerated purchases, grassroots grain prices in the production area have risen. Due to the large-scale temporary storage purchases and the earlier sale of this year's new grain, farmers' remaining grain in the current market is rapidly decreasing. Some information reflects that in the Heilongjiang region, no more than 5 million tons of corn eligible for transfer storage remain, and later it may face a situation where there is no grain available for transfer, so continued attention should be paid to the progress of temporary storage purchases.

North China production area: corn outflow is obvious, grain prices may bottom out and rebound

Grain prices in North China continued last week's trend, with prices in some grassroots areas rebounding, but the overall situation was stable, while deep-processing enterprises slightly raised prices. The market in this region has generally paid insufficient attention to the overall outflow of grain sources from North China and temporary storage purchases, with attention mostly limited to corn supply and sales within the local area. Some market news shows that traders from the Northeast have already gone to North China to store high-quality corn. Combined with the earlier low grain prices in North China, the amount of corn outflow has been relatively large. It is expected that once the market experiences tight grain sources after the Spring Festival, grain prices may rebound significantly.

Southern sales areas: the impact of higher freight rates on grain prices still needs time

After entering February, due to increased procurement demand in sales areas, grain prices rebounded locally, but overall remained weak. Although the overall moisture content of corn from North China and Shanxi remained relatively high, restraining purchasing, the large supply of naturally dried grain from the Northwest ensured sufficient grain sources in the market. In addition, downstream demand remained weak, and enterprises' inventory preparation funds turned over slowly. Although enterprises were optimistic about a price rise after the holiday, pre-holiday stockpiling was generally low. The earlier increase in railway freight rates has not yet shown obvious support for current corn prices, and it is expected that transmission to the market will still take time.

North and South ports: price increases in production areas support prices in both North and South

Affected by the continued acceleration of temporary storage purchases recently, grassroots grain prices in the Northeast production area have risen, providing support for North Port prices. At present, some purchasing entities at North Port have raised prices, purchasing willingness is average, and arrivals remain stable, but North Port's upside is limited by weak Guangdong prices. In southern sales areas, as the Spring Festival approaches, enterprise procurement has increased somewhat, and grain-using enterprises generally plan to begin stockpiling after the Spring Festival. This expectation may boost South Port prices later, but the large arrivals of Hebei corn and imported sorghum will put pressure on recent South Port prices.

Feed and breeding: enterprise shutdowns increase, pre-holiday rebound unlikely

With 10 working days left before the Spring Festival, some food processing and slaughtering enterprises have already shut down for the holiday due to poor market demand, further reducing market demand, and a pre-holiday price rebound is likely to be unlikely. Recently, live pig prices have continued to remain weak and declining, while egg and white-striped chicken prices have been in a weak and fluctuating pattern.

Deep processing: baijiu consumption is sluggish, alcohol prices keep falling

Recently, alcohol prices have not rebounded with the increase in baijiu consumption as the Spring Festival approaches. On the contrary, recent economic data show that PMI has fallen below the 50 boom-or-bust line. The weakening macroeconomic environment makes it difficult for demand for discretionary consumer goods such as baijiu to increase substantially. Affected by this, alcohol prices have continued to fall, and are currently down 100-200 yuan/ton compared with the same period last year. Losses for various enterprises have increased, and enterprises' stockpiling volumes have decreased.

II. Market forecast

In the Northeast production area, due to the acceleration of temporary storage purchases, grassroots grain prices have risen, directly driving a rebound in North Port prices. However, due to pressure from large arrivals of North China corn and imported sorghum, Guangdong port prices remain weak. Under mutual constraints between North and South, recent port gains may be limited. However, market research shows that due to sluggish terminal demand, most southern feed enterprises have postponed stockpiling. After the Spring Festival, with improved procurement demand and reduced market grain sources, grain prices may experience a wave of increases. Close attention should be paid to the progress of temporary storage purchases and the situation of remaining grain sources in the market.