Recently, the upward trend of corn prices around the world has attracted widespread attention in the international market, and the driving force behind this wave of price increases involves many factors, and has had a non-negligible impact on China, a major corn consumer. According to various sources, the global corn trade is expected to decline, with the tightening of supplies in major exporters being an important factor, and this change is directly related to price fluctuations.
In China, since the spring planting, the spot price of maize and the futures market in many regions have shown a clear upward trend. For example, data from mid-May showed that several major grain buyers in Northeast China have raised the purchase price of corn, reflecting subtle changes in the relationship between supply and demand in the market. For this round of price increases, industry experts believe that on the one hand, the pessimism accumulated in the early stage of the market has been moderately released; On the other hand, seasonal factors are beginning to provide fundamental support for corn prices, including contraction on the supply side and recovery on the demand side.
Specifically, the three pillars of the maize market are: the easing of supply pressures due to the near-end of farmers' grain sales, the demand side boost due to improved livestock margins and seasonal demand growth, and the external price support from the decline in production due to natural disasters in the international market, especially in South American maize producing countries, and the expected reduction in planted area in the United States.
As a major consumer of maize, China's imports have experienced significant fluctuations in the past few years, climbing from 4.79 million tonnes in 2019 to 28.35 million tonnes in 2021 before adjusting to rebound to 27.14 million tonnes in 2023. The USDA's forecast for China's corn imports to stabilize at 23 million mt in 2024/25 suggests that China's corn imports are likely to remain solid despite tight global supplies, supported by import margins in South China and global supply conditions.
However, the expected decline in global maize production, particularly in Argentina, Ukraine and the United States, has cast a shadow of uncertainty on international markets. This not only affects the global supply chain, but also indirectly affects China's corn market, mainly reflected in the change of import costs, the transmission of import substitution prices, and the fluctuation of market sentiment, although the direct impact is limited, but these factors work together to affect the fluctuation of domestic corn prices and the stability of the industrial chain.
For China, the fluctuation of corn prices directly affects the entire industrial chain, from agricultural production cooperatives to trade and circulation enterprises, to feed processing and aquaculture. Although corn prices may be supported by tight supply-demand balances and seasonal factors in the short term, in the long term, unless unforeseen factors such as extreme weather occur, the basis for large price fluctuations is not solid, and the impact on the industry is expected to be manageable.
Looking ahead, with the gradual clarification of the new corn season, prices may usher in a correction period in August and September, and the probability of a downward correction is high. In general, the price trend of the corn market will remain range-bound in the complex domestic and foreign environment, testing the ability of all links in the industrial chain to cope and adjust.