baccarat540200ml| The boost on the demand side is limited, and corn in the future may be under pressure

This article is derived fromBaccarat540200mlFutures daily

Since May, on the one hand, domestic corn has been gradually consumed, grass-roots surplus grain has gradually reduced, and the supply pressure has gradually reduced; on the other hand, most of the food sources have flowed into trade links, and the high cost has made traders have a strong mentality of sparing sales at low prices, pushing up corn futures prices. The current main contract 2407 rebounded from 2375 yuan / ton to 2474 yuan / ton, an increase of more than 4%. Last week, under the technical pressure such as the early intensive trading area, corn uplink was weak and there was a pullback.

Loose supply in the market

My Iron and Steel Network data show that as of May 10, the corn stock in the four northern ports is 363.Baccarat540200ml. 90,000 tons, down 116000 tons from the previous week, the first decrease since the beginning of this year, but still an increase of 679000 tons compared with the same period last year. Guangdong Port corn domestic trade inventory of 739000 tons, an increase of 55000 tons compared with the previous week, an increase of 310000 tons over the same period last year. From this point of view, domestic corn inventory is on the high side compared with the same period last year, and the channel pressure still exists. It is reported that under the lack of surplus grain at the grass-roots level and the reluctance of traders to sell, corn prices have been stable and strong recently, with the market price of second-class corn in Weifang in Shandong Province and the second-class closing price in Jinzhou Port rising to 2300 yuan / ton and 2410 yuan / ton respectively, but it is calculated that the price difference between Shandong and the northeast is upside down 110 yuan / ton, which to a certain extent reflects that the surplus grain is more than expected, and the supply still maintains a loose pattern.

Limited boost on the demand side

At the end of the first quarter of this year, the national stock of fertile sows was 39.92 million, a month-on-month decline for five consecutive months. Compared with a high of 43.9 million at the end of December 2022, the stock of fertile sows has reached 9 per cent. In the context of pig production capacity, pig feed demand has declined steadily or for the general direction, which is not conducive to the strengthening of feed raw material prices. In the short and medium term, the relationship between supply and demand in the pig market will further improve, or stimulate bullish sentiment in the market, and strengthen the expectation of stronger pig prices. At present, the market is bullish about the pig price in June and July, and the enthusiasm of the pig is getting higher and higher, and it is expected that there is a phased support for feed demand.

In terms of deep processing, the recent demand for starch sugar increases with the rise in temperature, driving corn starch out of stock. As of May 17, the product starch inventory was 1.117 million tons, which decreased for two consecutive weeks and still increased by 160000 tons compared with the same period last year. However, in the near future, starch enterprises are about to enter a seasonal maintenance period, the demand for raw material corn may gradually decline, at the same time, starch inventory still needs to be removed, and the subsequent replenishment of raw materials still tends to be cautious.

The import of cereals increased

According to the data, China imported 1.18 million tons of corn in April, up 17.6 percent from January to April. A total of 9.08 million tons of corn were imported from January to April, an increase of 6.5 percent over the same period last year. Since the beginning of this year, China's corn imports have continued to decline month-on-month, so the market predicts that corn imports this year will be more than 4 million tons less than last year. However, grain imports in April, including corn, sorghum, barley and wheat, were 5.55 million tons, an increase of 1.41 million tons over the same period last year, and a total of 42.39 million tons in the year to April, compared with 26.19 million tons last year. With the increase in grain imports compared with the same period last year, domestic corn demand is still likely to be squeezed out.

As a potential substitute for feed raw materials, the wheat market has attracted much attention recently. It is reported that when the price difference between wheat and corn falls back to about 150 yuan / ton, the role of wheat as a feed substitute is highlighted. At present, wheat is about to be fully on the market, and the market is expected to maintain high yields this year, but there are still the following uncertainties: first, there is too much rainfall in the early stage, wheat scab appears in Hubei and other places, and recently there has been dry and hot wind weather in parts of North China, which may lead to lower-than-expected wheat production; second, the auction of wheat in stored grain will be stopped and the market supply will be temporarily reduced, providing bottom support for wheat prices.

Generally speaking, although the supply pressure in the corn market has been alleviated, the surplus grain is still more than expected, the superimposed imported grain is much higher than the same period last year, and the demand is difficult to find, and the corn may be under pressure in the future. However, corn futures have fallen to levels around 2015, and from a valuation point of view, the downside of corn is limited. On the whole, corn maintains a low shock pattern, which does not rule out the gradual rise of the price center under the policy stimulus. (author unit: Changan Futures)

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