Analysis and Prospect of corn market in North China

Introduction: the following from the fundamentals, policy face this year (2001 / 02) North China corn market prospects do a rough outlook 1 This year, the situation of oversupply in China has not changed In terms of supply, the total corn production in 2000 was about 106 million tons, and it is estimated that the total corn production in 2001 will be about 110 million tons, with an increase of about 4% Considering that China may import a considerable amount of corn in this year, the pessimistic estimate is about 2 million tons According to this calculation, the total new supply in this year is about 11200 tons From the perspective of demand, the remarkable feature of China's corn demand in this year will be that feed consumption will continue to grow, and industrial consumption will increase significantly It is estimated that feed consumption in this year will reach 93 million tons, 2 million tons more than the previous year, 12 million tons more than the previous year, 1.5 million tons more than the previous year, and the total domestic consumption in this year is estimated to reach 125.9 million tons Due to the cancellation of export subsidies, the competition of American corn and other environmental conditions, it is estimated that the export volume of corn will decrease a lot It is estimated that China will export 3 million tons of corn this year, a 59% decrease over the previous year From the above balance analysis, the long-term fundamentals of this year are still insufficient production and demand It is estimated that there will be an inventory gap of about 16.67 million tons, which is 6.86 million tons less than that of the previous year However, according to the current inventory level, the situation of oversupply has not changed, which is slightly more moderate than last year In terms of North China, it is estimated that the total corn production in North China will be 39.17 million tons in 2001, an increase of 1% over the previous year Recently, due to the large number of new corn listed, the purchase price of new corn in Huanghuai area of North China is flat and low, and the purchase price is in a significant decline With the increase of the export volume of new corn in Henan and Shandong Province, the export volume of Shandong Province is relatively large because it is close to the markets in East and South China Since the first ten days of October, the arrival volume of Nanchang and Guangdong stations has been growing steadily The arrival volume of Guangdong stations has increased from 300 tons per day in the middle and last ten days of October to about 600-800 tons at present At present, it is very difficult to acquire 15 newly produced corn in Henan Province, which shows that the outflow rate is very fast This year's state-owned grain stations will purchase less corn than last year due to capital constraints, resulting in less corn stocks in North China than in the same period last year According to the current outflow rate, it is expected that by the end of December, corn export volume will be greatly reduced, and by February, corn export in North China will basically stop The local corn consumption in North China is also large For example, Shandong Province itself is a big province of feed culture At present, the commercial inventory of feed enterprises in this region is small, and there is no large-scale purchase in the near future Therefore, the southern part of North China may be transferred from corn output region to corn input region from February to March However, at the same time, the Northeast State-owned Grain station began to be busy with replenishing the storage Due to the gradual increase of the task of purchasing the whole grain and the gradual decrease of the ex warehouse profit, in January and February, the ex warehouse quantity of corn in the Northeast production area will decrease At the same time, in February, China's railway transportation capacity will be tight, and in February, the transportation volume of northeast jade rice will be greatly reduced 2 This year's corn market is greatly affected by the policy aspect, which is mainly determined by several factors, such as the corn purchase policy, the targeted marketing activities of the aged grain, the conversion and the new grain pressure storage, and the details of the commitment to enter the WTO This year, there are several major changes in China's corn purchase policy First, this year, China's North China Huanghuai region withdrew from the purchase scope of protection price Its impact on the market is mainly reflected in the purchase volume of state-owned grain enterprises Because the funds of state-owned grain storage and collection enterprises may be relatively tight, the corn purchase volume is not enough Because most of the private purchase will follow the receipt, on the one hand, it will create On the other hand, the outflow of corn increases, which means that once the market reverses, the price fluctuation will be larger Recently, the state has deployed a series of targeted sales activities of aged grain Although this year's directional sales activities of aging grain are different from the selling of aging grain in the previous two years, which limits the final consumption channels such as feed and alcohol, during the current price decline period, there are a large number of new corn on the market, which has a significant impact on the weak market A total of 1.268 million tons of stale grain were traded in Zhengzhou, including 330000 tons of corn It was learned that 1.338 million tons of stale grain were traded in Dalian on June 7, including 623000 tons of corn The two directional transactions before and after sold 2.066 million tons of stale grain, including 953000 tons of stale corn It is said that there will be a certain scale of sales activities of aged grain in the later stage In addition to the normal rotation this year, there are also new targets for new grain storage and loading to be completed The target for new grain reserves is about 13.5 million tons, of which northeast corn accounts for a certain proportion Because the new corn must reach the second-class level or above according to the requirements, and this year, due to the impact of drought, the proportion of corn in the Northeast production area has increased compared with that in the whole year, and the grain above the second-class level is relatively less In addition, some grain depots in the Northeast want to sell out their stocks in advance and then buy new corn at low price to gain profit space It is expected that the rush to buy back when the price declines may push up the purchase price, and the conversion and new grain pressure storage are likely to be the causes of the increase of the purchase price The influence of China's accession to the WTO on the corn market is mainly reflected in the corn export in the Northeast rather than the corn import in the south After China's accession to the WTO, China's government will no longer give export subsidies to export grain Therefore, from the perspective of domestic corn cost, without high government subsidies (about 368 yuan / ton in 2000, recognized as 40 dollars / ton in the Sino US agreement), domestic corn export is facing difficulties We estimate that China's corn export volume will decrease this year, and the import volume is only 3 million tons in 2001 / 02 At the same time, it is unlikely that China will import more than 2 million tons of corn this year First, China's actual demand is not so large In recent years, the annual output of domestic corn is not less than 105 million tons, and the corn inventory is relatively large At present, corn in North China has an advantage over that in the United States Only after the consumption of corn in North China can appropriate corn be imported Second, China has a great power effect 2 million tons of corn is enough to have a significant impact on the international market price, while the higher price in turn inhibits the total amount of imports to a certain extent In addition, domestic corn and American corn are not always at a disadvantage in price, but we are also required to pay attention to Chicago corn futures market Therefore, although this year's corn market can not be simply called "policy market", it is greatly influenced by policy, and several factors of policy are worthy of attention As far as the price trend of this year is concerned, the upward resistance of prices in the first and second half of this year is different The top price of domestic corn market in the first half of this year will be determined by the trend of international market prices, and the price ceiling in the second half of this year will be determined by the level of corn delivery in Northeast China Although there are favorable information such as the increase of central reserve around the end of the year, there are also restrictions on the listing of new grain in Northeast production areas and the impact of targeted sales of aged grain in the same period, so it is unlikely to have a big rebound before the end of the year At present, the average corn purchase price in Henan and Shandong is 0.43-0.44 yuan / Jin, and it is estimated that there is still room for decline It is estimated that the bottom line of the purchase price is about 0.40 yuan / Jin, The approximate bottom time is around the end of the year It is expected that the market in North China will rebound from the end of January to the beginning of February The basic reason for the rebound is that there is good information about the short-term fundamentals of local production At the same time, the rotation and the new grain storage in Northeast China and the tension of railway transportation capacity will also drive the price Moreover, the rotation and the new grain storage are also likely to be the causes of the price rebound It is expected that by the end of February, corn in North China will have a positive impact on the price rebound The average purchase price may rise to 0.44-0.45 yuan / Jin, close to the level in late October It is expected that from March to April, the price recovery effect of North China market will gradually fluctuate to the northeast and South China markets, and the corn market will enter the seasonal reversal market It is estimated that the corn purchase price in North China will reach a new high around May June, but it will be capped by the international market price at most by the Chicago corn futures price.