Nearly 50% lower than domestic prices of American corn is coming! Feed price reduction?

U.S. net corn sales for the week to January 28 reached an annual high of 7.4665 million tons, including 5.8604 million tons sold in China and 17.7 million tons sold to China this year, according to data released by the U.S. Department of Agriculture (USDA) on Feb. 4, local time.
consumption will reach 287 million, China "buys" American corn! As can be seen, U.S. corn sales are hot, and Chinese buyers are contributing.
why does China buy so much American corn? There are three main reasons.
is that demand for corn feed is rising as China's pig industry recovers rapidly.
that by the end of 2020, China's pig storage capacity has exceeded 400 million head, production capacity returned to the normal year of 92.1%; The number of sows that can breed is more than 41 million, double the number at the end of 2019.
, the U.S. also expects China to consume 287 million tons of corn in 2020-2021.
face of rising demand, the relevant enterprises have also opened the "buy, buy" model.
according to data from the State Food and Material Reserve Bureau on January 22, as of January 10, 2020-2021, domestic grain enterprises had acquired 62.79 million tons of corn, up from 50.77 million tons in the same period in 2019-2020.
, according to the purchasing manager of a large poultry company, the industry is stockpileing high-quality corn in order to stabilize production, and will rush to buy it, regardless of price.
in other words, the industry's rush to buy corn will continue.
2 is due to a cooperation agreement signed between China and the United States in early 2020, which stipulates that China will import $36.5 billion in agricultural products from the United States in 2020, and that soybeans and wheat are the "main players" in China-U.S. agricultural trade in addition to corn.
third is because American corn is "cheap".
, for example, U.S. corn is well-positioned to dump agricultural products at low global prices, thanks to modern machinery cultivation, lower costs, and U.S. government subsidies to farmers exporting agricultural products.
according to the Ministry of Agriculture and Rural Affairs corn market monitoring and early warning data, in December 2020, the average wholesale price of domestic production areas reached 1.24 yuan per kilogram, futures reached 2930 yuan / ton.
market news on February 4th, the spot price for yellow corn No. 2 in Meiwan was $6.225 a bushel, or $245.1 a tonne.
no match for Ukraine? The United States is not China's largest source of corn imports need to mention that although China imports a large amount of U.S. corn, but the United States is not China's largest source of corn imports.
2015, Ukraine overtook the United States as the country's largest source of imported corn, according to public information released by the United States. The data also show that in the first half of 2020, Ukraine accounted for 93.85 per cent of the country's total corn imports, with exports of 3.418 million tonnes, while the United States accounted for only 1.8 per cent.
addition, China has been committed to the diversification of corn imports, for example, in April 2020, COFCO also reached a cooperation agreement with Russian enterprises to transport 3,830 tons of Russian corn by sea to China; In December 2020, Abramilho, a Brazilian corn producers' association, also revealed that China and Pakistan had held talks to promote corn trade between the two countries, and that Brazil was understood to have sold 68,550 tons of corn to China in 2019.
of corn imports, the market is beginning to worry: the future of China's corn supply will form a situation of dependence on imports? In this regard, our country has been "two-pronged."
the other hand, China's corn harvest year after year.
2019 as an example, China's corn planting area has reached 4.4968 million hectares, an increase of 1.8% yoY, is expected to reach 45 million hectares by 2020; The sowing area has expanded and the yield has increased, with the total yield of corn in China increasing by 4 million tons to 265 million tons in 2020.
other hand, in order to alleviate the problem of tight corn supply and demand, China's relevant departments have continued to put national policy wheat, to replace corn as feed.
related reports: rising raw materials push up feed prices! How long will corn bean meal rise? Since 2020, the prices of China's main grain varieties have risen to varying degrees, as a result of small increases in ration varieties, corn, soybeans increased significantly.
end of December 2020, the purchase price of early indica rose by 10% YoY, the price of indica in the south rose by 20%, the price of indica in the north was basically stable, and the price of wheat rose by about 3%.
prices of soybeans and corn rose by more than 50%, both at record highs.
corn market supply and demand tight, overlay capital speculation, corn prices have driven up the price of rations.
Med wheat substitute corn quantity increase prices still have room to rise" by corn prices, traders and processing enterprises on the wheat price bullish expectations increased, policy wheat turnover increased significantly, wheat prices showed a recovery. Luo Wenxuan, deputy director of the
" National Food Trading Center, said that in January 2021, three policy wheat auctions had been organized, with a total of 11.97 million tons of wheat delivered, with a turnover of 11.03 million tons, an increase of 8.01 million tons month-on-month, with an average turnover rate of 92.15 percent, up from 14.99 percent the previous month, with an average transaction price of 2,456 yuan/tonne, up 114 yuan/tonne month-on-month.
For the current auction sales of the main reason for the rise in the price of policy wheat, the National Grain and Oil Information Center chief analyst Wang Xiaohui analysis: First, driven by the rise in corn prices, corn and wheat spreads further expanded, feed enterprises consider the cost-effective wheat and corn, more willing to use wheat instead of corn as feed, strong willingness to bid for policy wheat.
, on January 22, the price difference between corn and wheat in Zhengzhou, Henan Province, was 340 yuan/tonne, compared with about 90 yuan/tonne in the same period last month. The difference between corn and wheat in Jinan, Shandong Province, was 320 yuan per ton, compared with about 80 yuan per ton in the same period last month.
Second, flour dealers need to stock up before the Spring Festival, coupled with the outbreak in parts of Northern China, consumers in advance to purchase flour, distributors expect bullish prices of flour, flour enterprises in order to be able to sell more flour, but also improve the start-up rate.
, some traders expect a large gap in corn production, wheat replacement corn quantity may also increase later, think that prices still have room to go up, so participation in the bidding for wheat is more positive.
Luo Wenxuan introduced, in order to stabilize market expectations, january 21st, the State Food Trading Center issued a notice, adjusted the trading rules, clearly increase the margin limit, advance payment, shorten the payment period and other requirements, while the slow progress of the withdrawal of enterprises, restricting their continued participation in the auction.
rules will inhibit speculative capital participation in wheat auctions, market participants on wheat prices bullish expectations weakened.
with the Spring Festival approaching, some processing enterprises before the completion of the pre-holiday stock, after the festival is the flour sales off-season, continue to increase the purchase of insufficient power, in order to maintain a reasonable level of wheat market prices. In the latter part of
, as the country continues to release 4 million tons of policy wheat per week, reserves of wheat will also be rotated out of the stock, wheat market supply is abundant, spring is the low season for flour consumption, flour enterprises to purchase wheat demand weakened, these will have an impact on the wheat market, prices continue to rise significantly is unlikely.
Coy production gap widening prices there is a long-term expectation" since late December last year, corn prices rose 0.15 to 0.20 yuan per kilogram, up 0.50 yuan / catty year-on-year.
high corn prices, the fundamental reason is that the production demand gap is large price increase expectations.
with the gradual consumption of corn storage, the gap in domestic corn production needs has changed from implicit to explicit, and there is a long-term bullish attitude on corn prices between market subjects.
" Wang Xiaohui analysis Wang Xiaohui believes that the recent rise in corn prices also has other factors: First, the recent outbreak in some provinces and regions of the country, affecting local logistics, some enterprises worry about the spring after the delivery situation, short-term price increases generally increased willingness to stock.
, farmers in the main producing areas are selling corn faster than in the past year.
grain prices fell, farmers' willingness to bargain increased, and traders were able to receive food sources at high prices.
, the futures market trading body has strong expectations for the future corn market supply gap expansion, futures market and spot market linkage, market expectations are highly converge.
fourth, domestic and foreign markets linked to strengthen.
the global spread of the new crown pneumonia epidemic, increased risks to international food security, the weak dollar exchange rate, driving up commodity prices.
soybean and corn prices have risen sharply in the face of adverse expectations for food production in South America, particularly the La Nina phenomenon.
prices of corn futures in Chicago have risen by more than 60% in the past six months, accelerating imported transmission to china through trade, finance and other means.
Xiaohui believes that in the latter stages, domestic corn prices will maintain a high operating situation.
, especially in the short term, the impact of the new crown pneumonia epidemic continued, the main production area corn delivery will continue to support prices.
there are also some factors that inhibit the rise in corn prices, mainly because feed enterprises in order to save costs, the proportion of wheat instead of corn increased, procurement policy wheat more active.
grain-using companies have begun to add grains such as wheat and rice to replace corn, and some say they have started using corn-free formulas, and higher prices will further stimulate demand for alternatives.
, coupled with the import of corn, sorghum and barley and other raw materials into feed enterprises, will inhibit the enthusiasm of feed enterprises to purchase corn.
soybean acquisition progress is slow Market prices remain high in recent years, China has been pushing forward the structural reform of agricultural supply side, the implementation of soybean revitalization plan, adjustment and optimization of planting structure, domestic soybean planting area increased for 5 consecutive years.
of The National Bureau of Statistics shows that in 2020, China's soybean planting area of 148 million mu, an increase of 8.25 million mu, an increase of 5.9%; Soybean yield per acre 132 kg, an increase of 3.0 kg, an increase of 2.3%; Soybean production increased by 1.5 million tons, or 8.3%, to a new all-time high of 19.6 million tons.
production is mainly concentrated in Heilongjiang, Inner Mongolia and Sichuan and other places, Anhui and other Huanghuaihai production area soybean production.
increased soybean production by 7.25 million tons, or 58.7%, compared with 2015.
2020 domestic soybean market, the market price opened high, Heilongjiang soybean open scale price of 2.0 to 2.1 yuan per kilogram, up 0.3 to 0.35 yuan year-on-year.
January 22, 2021, the price of edible soybeans in Heilongjiang was 2.84 to 2.90 yuan per kilogram, up 1.0 to 1.1 yuan yoY, and the price of soybeans for oil rose to 2.38 to 2.4 yuan per kilogram, up 0.66 to 0.68 yuan YoY.
soybeans are mainly directly edible, processed soy products and soybean protein, a small amount for the production of soybean oil, domestic soybeans can basically meet domestic consumption needs.
Wang Xiaohui believes that from the acquisition situation, large, medium and small different sizes of the acquisition of the main body, the acquisition of inventory will be strong, superimposed with the epidemic, disaster, public opinion and other factors triggered a stronger rise in expectations, holding the grain subject to sell psychological aggravation, farmers sell grain slowly, with obvious seller market characteristics.
end-consumer enterprises are mostly with the purchase and sale.
recent outbreaks in Heilongjiang and Jilin regions, affecting soybean acquisition and export to varying degrees, and the market price of soybeans is expected to remain at a high level in the latter stages.