With the gradual consumption of grain sources at the grassroots level, the grain sources available for free circulation in the corn market have gradually shrunk, the supply and demand structure of the spot market has begun to change, and the marginal consumption of corn has gradually expanded. At the current point in time when the supply seems to be sufficient and the price is "affordable" enough, it is a "good opportunity" to build a warehouse.
During the Qingming holiday, the domestic corn market as a whole showed a regional mixed situation. Under the impact of the relatively concentrated scale of the upper volume, the market prices in Shandong and North China have fallen, and the mainstream purchase prices in other regions have shown varying degrees of upward trend.
The contradiction between long and short is still obvious
The margin of domestic trade consumption has quietly changed
Stimulated by the news of increasing reserves, the recent corn price increase in Northeast China has a significant momentum, and the terminal purchase price has been raised by 20~40 yuan/ton as a whole. One of the main price targets of the market, the northern port, also raised the price of corn by 10 yuan/ton during the festival. It can be said that the price center of gravity of the domestic corn spot market still maintained a steady upward trend after the Spring Festival during the festival.
Although it is an indisputable fact that the center of gravity of corn prices has been steadily rising since the Spring Festival, the contradiction between the long and short sides is still relatively obvious for the market's expectations. Among them, the bearish side of the market is more concerned with the increase in corn production in the new season, the sluggish downstream consumption, and the price increase is more due to policy promotion (including strict restrictions on bonded processing of imported corn, policy-based storage increase and brown rice delivery postponement again), rather than the fundamental change in corn supply and demand (oversupply).
At present, the inventory willingness of terminal enterprises, especially feed enterprises, is relatively low, and trading enterprises have also reduced their willingness to build warehouses to a certain extent, which has led to the market in the process of rising prices. But the market is often like this, under the overall relatively bearish sentiment, the essence of supply and demand fundamentals and the key point of the development trend - the marginal consumption of corn in domestic trade itself has quietly changed, has been ignored by most people in the market.
The marginal effect of demand expands
Low prices tempt or stimulate consumer enthusiasm
In the ocean of market economy, price is like an invisible hand, quietly guiding the "course" of consumers. It is not only a monetary representation of the value of a commodity, but also an important factor influencing consumers' purchasing decisions. High prices are often seen as a symbol of quality, but at the same time, they can effectively curb some consumer desires, on the contrary, low prices are often seen as synonymous with proximity, which can quickly stimulate the enthusiasm of the market.
Back to the corn market, with the start of a wave of decline in the fourth quarter of last year, the overall price center of gravity of the domestic corn spot market has been lowered by more than 500 yuan/ton, and the northern port has fallen from 2,850 yuan/ton to a minimum of 2,300 yuan/ton. Such a large decline in less than half a year is rare in the history of the corn market.
When the market attributed this round of sharp decline to a series of factors such as poor downstream consumption, bumper yields in the new season and expected growth of imports, the whole market seems to ignore the downstream consumption of corn spot market has begun to undergo qualitative changes in pessimism, and the consumption margin of domestic corn is gradually expanding, and the consumption "field" lost by internal and external grain substitution in the past three years is gradually returning to the consumption field of corn itself. In particular, the large-scale withdrawal of several key alternative varieties is expected, which makes the overall consumption of domestic maize expected to increase significantly.
Wheat substitution is withdrawn across the board
Corn consumption increased by 30 to 40 million tons
As we all know, last year's new season wheat is close to harvesting, an unprecedented "bad rain" made the wheat that should have been harvested under the "natural disaster" passive reduction, large-scale sprouts can only enter the field of feed processing, the market is conservatively estimated at 30 million ~ 40 million tons, such a large-scale substitute into the field of corn feed processing, so that the annual corn consumption is greatly reduced.
At present, although the market price of wheat in the new season has experienced a wave of obvious decline after the Spring Festival, the overall price is still higher than that of corn by more than 350 yuan/ton, and it is obviously unrealistic for wheat to replace corn as an energy feed raw material in most regions. Under the premise that the new season wheat is not affected by extreme weather, the probability of this situation is extremely low, and the probability of wheat returning to the field of feed processing on a large scale is also very low.
From this point of view, the substitution of 30 million ~ 40 million tons of sprout wheat in the previous year will return to the field of corn consumption this year, and such a level of increment can almost completely cover the upper limit of the market's growth expectation of corn in the new season (15 million ~ 30 million tons), and a certain supply gap can still be retained year-on-year. Taken together, the expectation of a large-scale "exit" of wheat substitution alone is enough to make the difference in total corn consumption between the two seasons by an order of magnitude.
Paddy stocking is still unknown
At present, it is a "good opportunity" to build a library
After the Spring Festival, the news about rice also disturbed the entire corn spot market, including the postponement of the deadline for the delivery of brown rice was "misinterpreted" by the market as a big negative, and the news that the deadline for the delivery of brown rice was postponed again in the later period and whether the release of aged rice will continue to be carried out in the year. Last year, under the premise that domestic corn was still running at a high level, the 18 million tons of aged rice in the market were put into auction, which provided the most important domestic trade supply in addition to wheat for the raw material demand of feed processing enterprises.
In fact, today's corn market has expectations for the targeted release of New Year's rice, and in the early stage, the news that the targeted rice will continue to be released at the end of March has been "self-defeating" with the passage of time. As for whether the method of targeted delivery can continue to be adopted during the year, it is still unknown whether part of the aged rice will continue to be released in the form of brown rice to feed processing enterprises. However, judging from the price comparison between corn and rice, it is unlikely that rice will continue to be implemented or even put into the market on a large scale for feed processing enterprises.
After all, the current price of corn has fallen to a low level in the past four years, and if rice wants to implement targeted release and form an effective circulation in the field of feed processing, it is necessary to further reduce the auction reserve price, which is obviously contrary to the steady increase in the minimum purchase price of rice in recent years. In terms of both rice and maize, the two major staple food varieties, it is clear that it will do more harm than good (to ensure price stability and ensure planting enthusiasm).
And back to the corn itself, it has been mentioned that the price of corn has experienced a decline of more than 500 yuan/ton in half a year, and its cost performance has gradually highlighted, in the past six months, deep processing enterprises, especially starch processing enterprises have been able to achieve steady profits, which has reflected the "dividend" brought by low-price corn to the industrial chain. Similarly, under the background of the bottoming out of pig prices, the recovery of poultry eggs and the large-scale withdrawal of domestic trade substitutes, the downstream consumption of corn has gradually recovered and shown the expectation of continuous growth.
With the gradual consumption of grain sources at the grassroots level, the grain sources available for free circulation in the market have gradually shrunk, and the supply and demand structure of the corn spot market has begun to change under the passage of time, and the marginal gradual expansion of corn consumption has become an indisputable fact. At this current time node when the supply seems to be sufficient and the price is "affordable" enough, it is a "good opportunity" to start the construction of the library. (The original article was published on the third page of the grain and oil market newspaper on April 11, 2024)
Source丨Grain and oil market newspaper
General Duty丨Liu Xinhuan Editor丨Congshen
