How long can the corn market support?

How long can the corn market support?

Recently, domestic corn has experienced a wave of small bull market. In addition to the macro factors hype and the combination of varieties, the micro level has also played a vital role. Since the collection of billions of dollars, the market has never been speculating on the shortage of grain sources. Stopped, so that it reached its peak in mid-April. Due to this, the corn price ushered in a rare daily limit. The market has finally recovered calmly, but how long can the domestic corn market remain calm under policy control? It deserves our attention.

Market storm is brewing

First, as of April 20, the cumulative purchases of the four provinces (districts) in Northeast China were 118.98 million tons, of which the overall grain sales in the Northeast region was 96%, which was 2 percentage points higher than the same period of the previous year. The progress of grain sales in Heilongjiang farmers For 97%, the progress of grain sales by farmers in Jilin is 91%, the progress of grain sales in Liaoning farmers is 96%, and the progress of grain sales in Inner Mongolia is 90%. Overall, the surplus grain in Northeast China and North China is nearing completion. This year's huge reserves have made the market's current grain supply tighten, and the country is still increasing its efforts to collect and store. On the one hand, on April 15th, in order to avoid the problem of regional farmers' “selling food difficulties”, the Northeast Reserve Corn Purchase Plan “Expansion”, the storage form of China Grain Reserve is unchanged, and the original storage units, including COFCO, China Textile and China Aviation, increase the scale of storage and storage, and allegedly increase the storage capacity by 4.25 million tons; on the other hand, on April 25 According to market media reports, according to the National Temporary Storage Corn Acquisition Policy, the 2015 National Temporary Storage Corn Acquisition Time expires on April 30 this year. As the executive body of the Jilin Province National Reserve Yellow Reserve Policy, the China Grain Storage Jilin Branch recommends that farmers pay close attention to the sale. In the hands of the rest of the grain, guaranteed income, from these two aspects we found that the government is expanding the amount of reserves from time and space, intending to "all" the market's total food income.

Secondly, Song Haihe, Director of the Purchase and Marketing Planning Division of the China Grain Storage Jilin Branch, said that we have requested the jurisdiction to collect and store the warehouse points in advance to announce the end of the acquisition period and related requirements, and will be in the time prescribed by the national policy. The sale of grain is not rejected, not limited, and should be collected in full, to protect the interests of farmers, and it is recommended that farmers make full use of the opportunity of national policy grain purchase, and realize the sale of grain before the end of the acquisition period.

In addition, on April 19, the China Grain Reserve issued a notice, and before May 1st, it was forbidden to sign a corn sales contract with the traders and individuals. The sales contract for the southern grain-using enterprises to determine the Hainan transport can still be signed, and the previous period has been signed. The sales contracts of Hainan Yun, local deep processing enterprises and feed processing enterprises must be sent to track the flow, ensure the shipment of corn into the port, and enter the factory, and resolutely prohibit the phenomenon of stocking corn in the stock, and the other signed corn. The sales contract will be stopped from the warehouse and will be postponed until May 1st.

Although the above aspects are unilaterally speaking, the price of corn is a bullish factor. However, it is not difficult to find that the overall analysis is carried out. The government has done a lot of storage on the one hand, and delayed the release of grain on the other hand, while constantly stressing the protection of farmers. Interests, the state intends to protect the peasants' basic interests and carry out the reform of the new corn system. At present, the price of purchasing and storage is relatively high relative to the market. In order to prevent the enthusiasm of farmers and ensure the interests of farmers, the state will collect large amounts of reserves, and the farmers will be in the hands of the farmers at the end of the collection. There is not much leftover. At this time, it is time for the country to start releasing grain. The state will sell the treasury corn at a very low price. The lower price will not cause great harm to the interests of farmers, but also better. Digest domestic stocks of corn.

Market fuse is about to ignite

According to customs data, in March 2016, China imported 575,400 tons of corn, an increase of 513% from the previous month and an increase of 1038% from the same period of last year; the import was higher at 834,000 tons, compared with 567,900 tons last month, and 922,200 tons in the same period last year; imported DDGS37.31 Ten thousand tons, last month was 180,800 tons, compared with 243,300 tons in the same period of last year; imported barley was 323,200 tons, last month was 261,800 tons, compared with 849,500 tons in the same period of last year. From the above data, China's corn substitute imports in March The overall volume has doubled, and the sharp increase in the number of imports has seriously affected the domestic market. However, this also indicates two points. The market will not worry about the lack of food, and the domestic volume will not be imported in time. The second point is that the domestic corn price is relatively The international market is still too high, and the company's enthusiasm is reduced. These two points are enough to reflect the market situation and the starting point of the government's grain sales. The import of international substitutes means nothing more than the domestic corn price is too high, the country wants to achieve the expectation of halving imports, low-cost selling corn is unstoppable, and this large number of alternative imports is a wake-up call.

On the whole, the surface of the seemingly calm after the domestic corn price surge in the previous period is actually a crisis. The author believes that although the fundamentals of downstream demand are gradually improving, the real function needs a cycle process to appear, and the short-term difficulties are reflected. At present, the government has begun to increase policy measures to collect the surplus grain of the market as soon as possible, laying the foundation for the subsequent corn sales. Therefore, under the guidance of the policy, it is expected that the market will be closer and closer when the market is closed. A new round of downturn in the market is about to start.
(Original title: A new round of "storm" is about to hit!)