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SunSirs: Domestic Corn Price Shocks Forward in August

September 04 2019 11:14:34     SunSirs (Eva)

  1.Price Trend

  According to the monitoring of SunSirs, the price of domestic maize remained volatile in August. The average price of yellow maize on August 1st was RMB 1881.43/ton, and on August 30th was RMB 1875.71/ton, with a slight drop of 0.30%.

  2.Cause analysis

  Auctions run normally in August. With the gradual release of stale grain, the overall supply environment of corn market is relatively relaxed, and the wait-and-see attitude of trade subjects in production and marketing areas is increasing. The overall turnover rate of China's reserves declines slightly in the month. On August 29, the turnover rate declines to 8.7%, and the average transaction price slightly declines to RMB 1668/ton, compared with RMB 1670 at the beginning of the month. Under the influence of the national reserve auction policy, the market price of corn in the production area is mainly affected by the outgoing price of the old grain stored in the national reserve. The price of corn in the Northeast production area has been slightly weakened due to the drop in volume and price in late August. Due to the extreme weather caused by Typhoon Lichma, the arrival of Maize in the port decreased. In order to stimulate the price of Maize in the port area to rise slightly in the middle of the arrival port, the market price of Maize in the port decreased slightly again with the resumption of transportation.

  In late August, some early spring maize appeared on the market sporadically in some areas, and the domestic maize was in an orderly convergence. In addition, the profit of deep processing continued to shrink. Some deep processing factories in North China, Shandong and other places were still in a state of shutdown and overhaul. The overall downstream wait-and-see attitude was strong. The trading of maize market was slightly light, and the price of Maize in North China remained stable as a whole.

  In August, domestic pig prices rose by 27.13% and egg prices rose by 28.91%. The rising market of breeding industry will support the recovery of corn feeding demand in the future. Affected by the factors of African swine plague, domestic pig stocks continue to decline and it is difficult to recover in the short term. The overall increase in demand for maize is limited, and feed demand is hard to support the domestic corn market price.

  3.Future Market Forecast

  Li Wenxu, an analyst of corn products in SunSirs, believes that the normal operation of the State Reserve auction, the gradual release of stale grain from warehouse, the sporadic listing of new grain, the loose supply of the domestic corn market as a whole, and the strong wait-and-see attitude of the trade entities have led to a slight weak adjustment of the domestic corn market price in late August, and the domestic corn price supported by the State Reserve Policy in the short term. In September, domestic corn market prices are expected to continue to follow the slight fluctuation of the ex-warehouse price of national reserve corn.

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