Recently, the government has increased its corn dumping capacity, but at the same time, the demand for corn feed and deep processing has been weak, and the corn spot has been stable and weakening. Affected by this, corn futures oscillated weakly. Looking ahead, corn futures are still easy to fall and difficult to rise.
Increased dumping efforts
In order to meet the corn market demand and steadily promote corn destocking, since the end of May, the government has begun auctions of temporary corn. First, auctions of overdue storage and corn storage were carried out. With the auction of these batches of corn, the spot price of domestic corn that surged in the previous period stabilized and fell back. According to monitoring, since the end of June, in the Huanghuai region of northern China, corn prices have fallen by 30-60 yuan / ton. However, due to the deviation of the quality of this part of corn, the market recognition is not high, and the turnover rate is decreasing week by week. Among them, on July 12th, over-storage and Xihao hoarded stored corn targeted sales plan of 1999589 tons, the actual turnover of 33280 tons, the turnover rate was only 1.66%. In contrast, better quality corn is still favored. Therefore, this week, the government kicked off the auction of relatively good quality corn that was collected and stored in 2013, that is, "spreading and subsidizing" temporarily storing corn. Among them, 2 million tons were released in Jilin, 1.5 million tons, 300,000 tons and 200,000 tons in Inner Mongolia, Liaoning and Heilongjiang. In addition to the overdue Tuesday and the storage of corn by Xi Yi, the amount of corn put in a week reached a historical amount of 6 million tons. In this Thursday's auction, it planned to sell 2003597 tons of corn in 2013, the actual turnover was 783082 tons, the turnover rate was 39.08%, the highest transaction price was 1690 yuan / ton, the lowest transaction price was 1500 yuan / ton, and the average transaction price was 1606 yuan / ton. . The transaction rate rebounded significantly.
Downstream demand is not strong
Maize demand mainly includes feed demand and deep processing demand. In terms of feed demand, the number of domestic pigs in May continued to increase, but the number of capable sows declined month-on-month, indicating a worrying production capacity in the later period. In addition, since the end of May, the price of live pigs has peaked and dropped, and the average price of ternary live pigs outside the country has dropped from 21.33 yuan / kg at the end of May to the current 18.84 yuan / kg, and the result is "cattle" (overweight) (Pigs) increased in the market. This means that the enthusiasm for raising pigs will tend to decline, and the decline in the number of "cattle and pigs" will also reduce the demand for feed. At the same time, recent heavy rains have continued to occur in the middle and lower reaches of the Yangtze River, resulting in floods and floods. It caused the collapse of poultry sheds and pig houses, and the destruction of fish and shrimp ponds, which brought a devastating blow to the farming industry, which will greatly affect the demand for feed including corn. In addition, due to cloudy and rainy days during the summer harvest, poorer quality wheat accounts for a larger proportion this year and can only be used as feed wheat. Because of its relatively low price, it can replace corn and also reduce corn feed consumption to a certain extent.
In terms of deep processing consumption, due to higher corn prices, starch production began to suffer losses. Although the current operating rate is still maintained at a high level close to 70%, with the further increase in losses, there will be more and more enterprises that cease production, and high operating rates are difficult maintain. In alcohol production, due to the low season of consumption, seasonal maintenance has increased and the operating rate is at a low level.
New crop corn grows well
Although the government proposed to reduce the corn planting area in the "Sickle Bend" area last year, due to the good planting efficiency, this year the domestic corn planting area will remain at a relatively high level. Due to heavy rainfall, corn is growing well in most parts of the country, and there is almost no drought. In the southern region, new crop corn can be harvested and listed in August, leaving less time for old corn to be sold.
In summary, due to high stocks, the government has greater pressure to remove stocks, and the post-storage efforts may continue to increase. However, after a stable supply source is expected, the demand-side buying desire of the demand side is low, and the demand is not strong, and the spot price of corn is expected to be weak. Correspondingly, corn futures are naturally difficult to strengthen.
