Corn market forecast: Heavy buying and selling tasks, winter trading unlikely to be quiet
I. Spot market
Northeast production area: Farmers show strong sentiment to hold grain and wait
Recent statistics from the National Grain Information Center show that in the week ending November 16, the grain-selling progress of farmers in the three northeastern provinces and one region was 15%, 8% slower than the same period last year, with Heilongjiang showing a particularly notable year-on-year slowdown in grain selling. Grassroots purchase prices have remained continuously low, and farmers have a strong sentiment of holding grain and waiting, but before January they face loan repayment pressure, while the festival and next spring's agricultural input preparations both require cash, so pressure for increased supply in the production areas later on still remains.
North China production area: Rain and snow boost the market, which fluctuates stronger
As the strongest cold air mass of the second half of the year set off, with average temperatures dropping 6-10°C, last night Henan, Shandong and Hebei began to see widespread first snow of the year, with heavy snow and blizzards in some areas, snow accumulation and icy roads, reducing arrivals at enterprise gates, and some deep-processing enterprises in Shandong recently raised gate purchase prices by 20 yuan/tonne or more. However, after this round of rain and snow weather, attention should be paid to whether rising temperatures will pose challenges to grain quality storage in the production areas.
Southern sales areas: Transactions show signs of peaking and falling back
In inland parts of the sales areas such as Sichuan, affected by persistently tight railway transport capacity, arrivals were relatively tight, and arrival station and transaction prices continued to rise, but in parts of central China such as Jiangxi, railway arrivals increased noticeably compared with earlier, with new-season arrivals from Heilongjiang, Jilin and other places accounting for the mainstream of market transactions, and with lower sea freight rates and increased arrivals at wharves, overall transaction prices peaked and fell back by 20-50 yuan/tonne or more. This round of market fluctuation and pullback may provide conditions for pre-Spring Festival stockpiling.
North and south ports: North China liner freight rates lowered
Recently, snowfall in the production areas and ports has hindered arrivals and unloading operations, especially at Bayuquan Port where many vehicles were stranded as a result, and combined with the fact that corn currently arriving at the port is basically delivery under earlier contracts, the north port market has remained firm overall. But this week north China liner freight rates were lowered to 86 yuan/tonne, a reduction of about 6 yuan/tonne, and carryover inventory this week is expected to reach more than 250,000 tonnes. With expectations of a significant rebound in in-port inventory, mainstream corn quotes at Guangdong Port are adjusting weakly.
Feed and breeding: Guard against the impact of a cold winter on breeding
Experts predict that this winter in China may be a cold winter, with transport affecting shipment and cold winter weather highly prone to swine disease outbreaks such as influenza and diarrhoea. Entering winter, especially with the recent sharp drop in temperatures, swine diseases have also entered a high-incidence period. At present, swine diseases are mainly diarrhoea and respiratory syndrome, and market surveys show that swine influenza is trending upward, while swine diseases show a development trend from north to south. Operators are reminded to manage pens well.
Deep processing: Starch product prices supported
Recently, starch product quotes have continued to rise overall by 20-50 yuan/tonne or more. Currently, mainstream starch quotes in North China are 2200-2300 yuan/tonne, and mainstream starch quotes in the Northeast are 2050-2100 yuan/tonne. At present, enterprises' raw material procurement and product generation are mostly based on contract orders, and some downstream enterprises' product procurement orders extend to around mid-December. As pre-festival stockpiling gradually begins later, starch product prices are supported.
II. Market forecast
During "Minor Snow", most of the main northern production areas will be mainly affected by a round of cold air bringing windy, rainy and snowy weather, with stronger snowfall expected in western Huanghuai, northern Jianghan and other places. The temperature drop is temporarily favourable for grassroots corn storage, and especially the low-level fluctuation of prices in the production areas further weakens farmers' enthusiasm for selling grain, so grain prices are supported in the short term. But with this year's Spring Festival earlier and loan repayment pressure, entering December the corn spot market will unavoidably face a wave of increased grassroots supply, so farmers are advised to sell grain at the appropriate time. At the same time, with this year's Spring Festival earlier and logistics capacity not smooth enough, downstream grain users' procurement and stockpiling tasks are also relatively arduous.