clubillionfreecoins| Corn: Mood improves, quantity and prices rise

Source: Zijin Tianfeng Futures Research Institute

[20240413] Corn: mood improves, volume and price rise

Summary of viewpoints

Core point of view: neutral Ukraine's Ministry of Agriculture said that as of May 10, Ukrainian corn exports in 2023max 24 (which began in July) could fall to 20 million to 21 million tonnes, down from 27 million tonnes in 2023max 24. Last week, the temperature anomaly in the main corn producing areas of Brazil was on the high side, with little difference between the central region and previous years, while there was more precipitation in the south. This week, it is expected that the temperature in the main corn producing areas in Brazil is still on the high side, and there is still more precipitation in Rio Grande do Sul, but the drought in the main corn producing states in central Brazil may continue, which is not conducive to the growth and development of the local second crop of corn. Brazil 23x24 harvest rate of one crop of corn 63Clubillionfreecoins.1%, the sowing rate of second cropping corn is 100%. According to the crop progress report released by the United States Department of Agriculture, the sowing of corn in the United States had been completed as of May 10.Clubillionfreecoins36%, compared with 42% in the same period last year, with a five-year average progress of 39%.

Last week, the weekly average price of corn across the country was 2333 yuan / ton, up 2 yuan / ton from the previous month. Northeast production area purchase and sales stalemate, deep processing enterprises overhaul increased, and the arrival of contract grain, feed enterprises to maintain safety inventory, demand has not been significantly boosted. Corn prices in North China rose rapidly during the May Day holiday and maintained a narrow adjustment after the holidays. with the reduction of surplus grain and the improvement of market mentality, the supply pressure of traders before the wheat harvest in June was significantly weakened. The coastal areas and the areas along the Yangtze River are pulled up by the futures market, and the quotation sentiment of traders is enhanced, which increases by an average of 40-50 yuan per ton during the week.

Last week, pig prices showed a narrow range of rise and fall adjustment, the weekly center of gravity is slightly stronger. On the supply side, the two breeding pigs were concentrated in the column before May Day, and the proportion of fat pigs in more land decreased after the festival.Clubillionfreecoins; and the price difference of standard fertilizer returns, the intention of large-scale enterprises to gain weight is low, and the source of heavy pigs is mainly. On the demand side, the market demand fell after the festival, the digestion of frozen pork was slow, and the overall storage rate of frozen pork changed little. Terminal consumption is not prosperous, the temperature in various places is generally rising, and the goods in white strips are diluted. It is expected that next week, the pig market may maintain a weak pattern of strong supply and demand, the market or a narrow range weakening, and the center of gravity of pig prices will move down slightly. In terms of deep processing, corn starch processing profits have increased, North China is still profitable but Northeast China has lost money, the opening rate of corn starch enterprises has increased month-on-month, and corn consumption has increased. In the follow-up, we will focus on the changes in profits and demand for by-products of deep processing enterprises.

Overall: last week, the corn plate continued to rebound and rise, which was significantly higher than before the festival. As the progress of corn sales continues to advance, the surplus grain will be further reduced, and at the same time, the market will transfer wheat harvest, the amount of corn will be greatly reduced, the sales pressure will weaken, and prices will continue to rise; in addition, last week, affected by weather speculation and diseases and insect pests at the end of foreign origin, the shock uplink of corn on the outer disk also played an emotional role in stimulating the domestic market. This week, we need to focus on the intensity of corn in North China, the harvest of new wheat and the weather at the end of the producing area. To sum up, corn 2407 contract prices are expected to fluctuate between 2420 yuan / ton and 2480 yuan / ton this week.

Producing area: according to the Ministry of Agriculture of Ukraine, as of May 10, Ukraine's corn exports in 2023 to 24 (which began in July) could fall to 20 million to 21 million tons, down from 27 million tons in 2023 in 24. Last week, the temperature anomaly in the main corn producing areas of Brazil was on the high side, with little difference between the central region and previous years, while there was more precipitation in the south. This week, it is expected that the temperature in the main corn producing areas in Brazil is still on the high side, and there is still more precipitation in Rio Grande do Sul, but the drought in the main corn producing states in central Brazil may continue, which is not conducive to the growth and development of the local second crop of corn. Brazil 23x24 harvest rate of one crop of corn 63Clubillionfreecoins.1%, the sowing rate of second cropping corn is 100%. According to the crop progress report released by the United States Department of Agriculture, 36 percent of corn sowing in the United States was completed as of May 10, compared with 42 percent in the same period last year, with a five-year average progress of 39 percent.

Domestic supply: neutral last week, the national weekly average price of corn was 2333 yuan / ton, up 2 yuan / ton from the previous month. Northeast production area purchase and sales stalemate, deep processing enterprises overhaul increased, and the arrival of contract grain, feed enterprises to maintain safety inventory, demand has not been significantly boosted. Corn prices in North China rose rapidly during the May Day holiday and maintained a narrow adjustment after the holidays. with the reduction of surplus grain and the improvement of market mentality, the supply pressure of traders before the wheat harvest in June was significantly weakened. The coastal areas and the areas along the Yangtze River are pulled up by the futures market, and the quotation sentiment of traders is enhanced, which increases by an average of 40-50 yuan per ton during the week.

Feed demand: short pig prices showed a narrow range of rise and fall adjustment last week, the weekly center of gravity is slightly stronger. On the supply side, two large pigs were concentrated on the supply side before May Day, and the proportion of fattening pigs decreased after the festival; and the price difference of standard fertilizer returned, and the intention of continuous weight gain of large-scale enterprises was low, and the main source of heavy pigs was more. On the demand side, the market demand fell after the festival, the digestion of frozen pork was slow, and the overall storage rate of frozen pork changed little. Terminal consumption is not prosperous, the temperature in various places is generally rising, and the goods in white strips are diluted. It is expected that next week, the pig market may maintain a weak pattern of strong supply and demand, the market or a narrow range weakening, and the center of gravity of pig prices will move down slightly.

Deep processing demand: more deep processing, corn starch processing profits have increased, North China is still profitable but Northeast China has a loss, the opening rate of corn starch enterprises has increased month-on-month, corn consumption has increased. In the follow-up, we will focus on the changes in profits and demand for by-products of deep processing enterprises.

Substitutes: in terms of more substitutes, wheat prices fell month-on-month last week, and the price gap between jade and wheat shrank but still large, which still supports corn prices.

Weather conditions: it is expected that in the next 10 days, the light and temperature conditions in Northeast China are good, most of the soil moisture is suitable, and the meteorological conditions are generally conducive to the sowing and emergence of spring corn. On the 14th and 17th-20th, the dry and hot wind weather will occur in Huang-Huai and the south of North China, which is disadvantageous to the grain filling of wheat.

Situation of foreign origin

USDA: report on supply and demand of American Corn in May

On May 10th, USDA released a report on the balance of supply and demand in May. In 2024, the forecast of US corn supply and demand for 25 years will increase, domestic consumption and exports will increase, and ending inventory will increase. Us corn production in 2024x25 is expected to be 377 million tons, a decrease of 3% compared with last year, as the impact of the reduction in sown area is partly offset by an increase in per unit yield. The total use of corn in the United States will increase by less than 1% in 2024 to 25 over the previous year, due to an increase in domestic consumption and exports. Food, seed and industrial consumption is expected to be 174 million tons. As automotive gasoline consumption is expected to be basically stable, the amount of corn used to produce ethanol will be the same as the previous year. Feed and other consumption is expected to increase as a result of increased supply and expected lower prices.

In terms of old work, exports are expected to increase by 1.27 million tons over the April forecast, and domestic consumption is expected to increase by 1.26 million tons compared with the April forecast, and the corresponding end-of-period inventory and inventory-to-sales ratio are reduced simultaneously. As a whole, the old end tends to be positive.

Us: us Corn Export

In the week of May 10, the net sales of corn exports of the United States in 2023 Compact 2024 were 889000 tons, compared with 758000 tons the week before, an increase of 17.28 percent over the previous week. The total amount of corn exports from the United States was 34.443 million tons, and the outstanding sales were 13.1801 million tons. The overall sales progress was 87.21%, which was 22.68% higher than that of the same period last year, and the overall sales progress was slightly faster than that of the same period last year.

United States: the situation of US Corn Export to China

The United States shipped 1.231 million tons of corn in 2023, compared with 1.382 million tons the week before; the United States shipped 82000 tons of corn to China (mainland), compared with 82000 tons in the previous week, an increase of 82000 tons from the previous week, and a cumulative sales volume of 2.196 million tons to China, which is generally at a historical low.

Us: net long position of US Corn Fund increases

In the week ended May 10, long positions in US corn were 176000 hands, an increase of 8500 hands from the previous week, while short positions were 394000 hands, down 14700 hands from last week.

In the week ended May 10, the net long position was-213100 hands, an increase of 12800 hands over the previous week, and the willingness to be long increased. That week CBOT corn main contract price as low as 454.25 cents / bushel, the highest price of 472.00 cents / bushel.

USDA: report on supply and demand of Brazilian Maize in May

In May, according to the latest USDA estimate, Brazil's corn production forecast for 2023 Compact 2024 was lowered to 122 million tons from the previous 124 million tons, and the market is expected to be 122.4 million tons. Corn exports in 2023x24 are estimated to be 50 million tons, a decrease of 2 million tons compared with the previous month's value; corn exports in 2024 are estimated to be 49 million tons, and production is estimated to be 127 million tons.

Overall, the latest USDA report does reflect expectations of reduced Brazilian corn production and exports due to the weather. This is also good for the price of outer-dish corn to some extent. However, in terms of new works, it is expected that Brazil's new production will continue to grow, with exports falling but still relatively high, which also indicates that Brazil still relies on its cost advantage to maintain high export expectations and production at a relatively high level. the overall supply conditions for new works are still relatively loose.

Brazil: major corn producing areas in central China are expected to continue drought next week

In the week of May 10, the temperature anomaly in the main corn producing areas of Brazil was on the high side, the precipitation in the central region was not much different from that in previous years, and there was more precipitation in the south. NOAA predicts that the temperature in the main corn producing states in Brazil will remain high in the next 6-10 days, and there will still be more precipitation in the southern Brazilian state of Rio Grande do Sul, but the drought in Mato Grosso and Parana states in central Brazil may continue, which is not conducive to the growth and development of the local second crop corn.

Brazil: one-crop corn harvest promotes the completion of second-crop corn sowing

As of the week of May 10, the average harvest progress of the first crop of corn in Brazil in the crop year 2023-2024 was 63.1%, which was slow compared with the same period last year. The sowing rate of the second crop of corn was 100.0%, 100.0% last week, and 100.0% in the same period last year.

According to the national average weighted by the total sown area of GO, PI, TO, SP, MG, MA, MS, MT and PR, the flowering part of the first crop of corn in Brazil accounted for 0.4%, the filling stage accounted for 7.6%, the mature part accounted for 28.9%, and the harvest accounted for 63.1%. The vegetative development stage of the second cropping corn accounted for 8.6%, the flowering part accounted for 27.2%, the filling stage accounted for 56.9%, and the mature part accounted for 7.3%.

Brazil: weekly corn exports increased month-on-month

According to the latest estimates from Brazil's Anec, between May 5 and May 11, Brazilian corn exports totaled 207200 tons, compared with 49200 tons last week, an increase of 158000 tons from the previous month.

As of May 10, according to the latest estimates from Brazil's Anec, Brazilian corn exports are expected to reach 548400 tons in May, compared with 493500 tons in the same month last year, a decrease of 54900 tons compared with the same month last year.

As of that week, Brazilian corn exports totaled 4.3707 million tons from January to April in 2024, a decrease of 3.3799 million tons, or 43.60 percent, compared with 7.7506 million tons from January to April last year.

Import cost: Meiwan corn import has a slight advantage

As of May 10, the arrival cost of Brazilian corn in July was about 2139 yuan / ton in the second half of the year, 2086 yuan / ton in May, 2115 yuan / ton in July, 2129 yuan / ton in May and 2139 yuan / ton in July. The trading price of bulk grain in Shekou Port is 2440 yuan / ton, and Meiwan corn has a slight advantage.

Domestic supply and demand situation

Weather conditions: the weather in the producing area is expected to be favorable for spring ploughing and spring sowing this week.

As of the week of May 7, the temperature in most parts of China is close to the same period of the year or on the high side, with the central and western parts of Northeast China and most parts of North China being 1-4 ℃ higher, and the precipitation of western Heilongjiang, eastern Jilin and eastern Liaoning is 25-100mm. Last week, the weather in Northeast and North China was better, which was conducive to the sowing of spring corn and the trade circulation of old corn.

It is estimated that in the next 10 days, the light and temperature conditions in Northeast China are good, most of the soil moisture is suitable, and the meteorological conditions are generally conducive to the sowing and emergence of spring corn. On the 14th and 17th-20th, the dry and hot wind weather will occur in Huang-Huai and the south of North China, which is disadvantageous to the grain filling of wheat.

Port inventory: North Port inventory increased month-on-month

Up to the week of May 10, corn stocks in the four northern ports totaled 3.755 million tons, an increase of 84000 tons compared with the previous week, and the port inventory showed a trend of gradual increase. The reason is that the grain supply in Northeast China has increased, the progress of grain sales has been further promoted, and the supply of corn in ports has increased.

Port inventory: month-on-month increase in corn inventory in Guangdong Port

As of the week of May 10, the foreign trade corn stocks in Guangdong Port totaled 1.18 million tons, 1.01 million tons more than last week, an increase of 170000 tons. Among them, Guangdong Port domestic trade corn inventory totaled 684000 tons, an increase of 59000 tons over last week, and foreign trade inventory of 492000 tons, an increase of 106000 tons over last week.

Feed demand: breeding profits have rebounded

As of the week of May 10, the national average price of live pigs was 14.94 yuan / kg, up 0.06 yuan / kg from last week, 0.40% from the previous month, and 4.04% from the same period last year. In terms of breeding profit, the profit of self-breeding was-43.97 yuan per head, and the profit of purchasing piglets was 96.25 yuan per head.

Last week, pig prices showed a narrow range of rise and fall adjustment, the weekly center of gravity is slightly stronger. On the supply side, two large pigs were concentrated on the supply side before May Day, and the proportion of fattening pigs decreased after the festival; and the price difference of standard fertilizer returned, and the intention of continuous weight gain of large-scale enterprises was low, and the source of heavy pigs was mainly produced, so the overall market was stable and slightly lower. On the demand side, the market demand fell after the festival, the digestion of frozen pork was slow, and the overall storage rate of frozen pork changed little. Terminal consumption is not prosperous, the temperature in various places is generally rising, and the goods in white strips are diluted. It is expected that next week, the pig market may maintain a weak pattern of strong supply and demand, the market or a narrow range weakening, and the center of gravity of pig prices will move down slightly.

Feed demand: profits of poultry breeding

As of the week ending May 10, the weekly profit of raising hairy chickens was-1.52 yuan per chicken, and last week-2.16 yuan per chicken, up 0.64 yuan from last week. The weekly breeding profit of parent breeder chickens was 0.40 yuan per chicken, compared with 0.38 yuan per chicken last week, up 0.02 yuan from last week. The weekly profit of laying hens was 11.41 yuan, which was 10.33 yuan higher than that of last week.

Last week, profits from raising hairy chickens rose. The overall price of hairy chicken does not change much, and the increase in profit is mainly due to the fact that the cost of chicken seedlings has dropped from 3.61 yuan / feather to 3.27 yuan / feather; the retail side has a profit of about 1.00 yuan per feather without considering the cost of depreciation labor. At present, the mentality of filling hurdles at the breeding end is insipid, and there is no obvious choice of node supplementary hurdles. In terms of laying hens, corn and soybean meal increased during the week, and the breeding cost of laying hens increased month-on-month. Egg prices are mainly upward this week, the market is looking forward to rising sentiment, downstream trading has improved, various links of inventory has been released, pulling egg prices continue to rise. As the weekly average price of eggs rose month-on-month this week, breeding profits rose at the same time.

Stock of feed enterprises: the number of days in stock decreased compared with the previous month

In the week ending May 10, the average corn inventory of sample feed enterprises was 30.33 days, 0.19 days lower than last week, 0.65% lower than the previous week, and 11.09% higher than the same period last year.

Industrial demand: processing profit of corn starch enterprises

As of May 10, the deep processing profit of corn starch in Jilin was-33 yuan / ton, down 6 yuan / ton from last week, and that of Shandong corn starch was 0 yuan / ton, down 8 yuan / ton from last week. Heilongjiang corn starch deep processing profit is-49 yuan / ton, up 3 yuan / ton compared with last week. Hebei corn starch deep processing profit of 105 yuan / ton, up 38 yuan / ton compared with last week.

On the whole, the regional differentiation of processing profits in the main producing areas is obvious, and the processing profits in North China are still higher than those in Northeast China. The reason is that last week, corn in North China still maintained a high volume, and prices fell slightly, while the northeast region was boosted by the increase of reserves, the sale of tide grain was basically completed, and the decline in corn prices was relatively small, so the profits of corn starch enterprises in North China were stronger than those in Northeast China.

Industrial demand: the opening rate of deep processing enterprises increased month-on-month.

As of the week of May 10, the starch utilization rate of 66 enterprises was 67.95%, up 1.6% from last week.

With the end of maintenance enterprises before and after May Day holiday, the recovery rate of corn starch industry has increased, and the output at the supply side is running at a high level.

Industrial demand: consumption of deep processing enterprises increased month-on-month

In the week ending May 10, the country's major corn processing enterprises consumed a total of 1.2603 million tons of corn, an increase of 6900 tons over the previous week. Of this total, corn starch processing enterprises consumed 664500 tons of corn, an increase of 12300 tons over last week; amino acid enterprises consumed 205500 tons, unchanged from last week; and alcohol enterprises consumed 390300 tons, 5400 tons less than last week.

Industrial demand: corn inventory in deep processing enterprises decreased month-on-month.

In the week ending May 10, corn stocks in 96 deep processing companies totaled 5.702 million tons, down 2.43 per cent from the previous week.

The arrival volume of deep processing enterprises in Northeast China has increased, and the inventory level has recovered to some extent, but the increase is not significant. The market supply in North China has decreased, the arrival of goods in front of deep processing has decreased, and the inventory level has declined. On the whole, the national deep processing inventory level has declined.

Industrial demand: the morning arrival volume of downstream deep processing decreased compared with the previous month.

In the week ending May 10, Shandong deep processing reached a total of 2090 vehicles, a decrease of 2315 vehicles, or 9.71%, from the previous week.

Last week, the number of cars arriving in front of deep processing decreased compared with the previous week, and grain sources in North China continued to be consumed. In addition, the bullish atmosphere in the market was gradually strong, so that the number of vehicles decreased and the price of deep processing increased to promote income. At present, the progress of grain sales in North China has exceeded 80%, and the purchase price of deep-processed corn has been adjusted according to the quantity. In the follow-up, we will focus on the changes in profits and acquisition prices of deep processing enterprises.

Starch demand: prices of corn starch and by-products

In the week ending May 10, the price of corn starch was 2940 yuan / ton, up 20 yuan / ton from the previous month; the price of corn germ meal was 1370 yuan / ton, up 120 yuan / ton from the previous month; the price of corn gluten meal was 4380 yuan / ton, unchanged from the previous month; the price of corn bran was 820 yuan / ton, down 10 yuan / ton from the previous month.

Corn by-product prices rose steadily this week, and the transaction was better. The rise in the early price of soybean meal this week led to the synchronous uplink of protein powder, which was stable and fluctuating after the week. The manufacturers' recent order acceptance was better than that of the previous period, and most of the goods needed to be ordered. Fiber and germ meal are stable and weak performance, feed enterprises rigid demand to buy, the actual transaction is general. On the demand side, there is still no actual recovery, and the overall procurement is still cautious.

Starch demand: downstream opening probability of corn starch

As of the week ending May 10, the opening rate of F55 fructose syrup was 40.35%, which was 7.43% lower than that of last week. During the May Day holiday, some enterprises raised prices and limited production, resulting in a decline in start-up. The operating rate of maltose syrup was 47.37%, down 1.97% from last week. Downstream demand is off-season, and some enterprises limit production during May Day holiday, resulting in a decline in start-up. The opening rate of corrugated paper was 60.38%, 2.46% lower than that of last week, and the start-up of containerboard was 63.71%, 1.21% lower than that of last week.

Basis situation: corn spot price and basis trend

As of May 10, the average spot price of corn was 2345 yuan / ton, and the corn base difference was-61 yuan / ton.

In terms of basis, the corn base fluctuated downwards last week. The price of corn spot side fluctuated and stabilized; on the disk side, the main corn contract bottomed out and rebounded, with a weekly increase of 2.72%, so the basis fluctuated downward. It is expected that with the further promotion of corn sales in North China, spot prices or stable operation, the disk is still expected to overshoot, the basis or maintain shock weak operation.

Price difference: corn price difference

In the week ended May 10th, the corn futures spread structure was 2407 discount 2409 and 2409 liters 2501.

Generally speaking, September is a period of disconnection between new and old corn, the consumption of old crops is basically over, there is no large-scale harvest on the market, the market is in a period of less supply pressure, and demand is also in a turning period from light to exuberant, so the contract price in September is stronger than in July and January. And the willingness to plant corn in the new season will not change very much. with the introduction of the national 100 billion jin grain plan and other policies, corn production in the new season is still expected to increase, and January is the peak period of traditional grain sales, and prices are under pressure. therefore, the 2407 discount 2409 contract increased by 2501 contract. With the recent consumption of surplus grain and the reduction of supply pressure, and the expectation of further improvement in downstream demand, the contract price of corn may still be expected to rise in recent months, and the price spread of 79 may be expected to expand.

Substitutes: the price difference between corn and wheat shrank.

As of May 10, the average market price of wheat was 2584 yuan/ton, the average market price of corn was 2345 yuan/ton, and the price difference between wheat and corn was 239 yuan/ton, down 48 yuan/ton from last week.

This week, wheat market prices fell widely, and market purchases and sales were light. During the May Day period, Chen wheat auctions were concentrated on the market, and the market supply of grain sources was sufficient. As Xinmai approaches the listing, the market has a strong bearish attitude towards Chen Mai. The inventory level of powder companies can meet the immediate needs of production, and their willingness to continue to build warehouses at high prices has weakened, and purchase prices have been successively lowered. Wheat prices are expected to continue their decline next week, and we will pay attention to the harvest of new wheat.

Customs data showed that China's wheat imports in March were 1.77 million tons, a year-on-year increase of about 34%, and a slight month-on-month decrease. 1-3 Monthly wheat imports totaled 4.253 million tons, a year-on-year decrease of approximately 1.5%. The main import source countries include: Australia imported 1.68 million tons, accounting for 39.6%; France imported 1.06 million tons, accounting for 25%; Canada imported 920,000 tons, accounting for 21.7%; and the United States ranked fourth with imports of 390,000 tons, accounting for about 9.2%.