Policy food "invasion" North China Northeast ushered in the test

[China Agricultural Machinery Industry News] In April, the prevalence of corn prices was lower than that of new grain. In May, with the acquisition of the deposit by the temporary storage , the market was gradually tightened. Especially in the northeastern region, however, in the North China market, the surplus grain is limited, and the rhythm industry of rotating corn is showing an increasing trend. The country’s destocking “prologue” gradually opened.

Policy food "invasion" North China Northeast ushered in the test

Beginning in April, the rotation of corn across the country began to be out of the warehouse, the price basically followed the market, because the quality is slightly worse than the new grain, generally slightly lower than the price of new food. In May, with the acquisition of the temporary reserve with a total of 125.43 million tons of “day volume”, the market trade grain source gradually became tight, especially in the northeast. At present, the northeast grassroots grain source is basically the same, and the rotation of corn has become the main supply of the Northeast market. The surplus grain in the North China market is limited, and the rhythm of the rotation of corn is increasing. In addition, the grain source in the northern port is basically based on rotating corn, and the market in the sales area is rotated for continuous supply of corn. Overall, the market's new grain gradually bottomed out in May, and the proportion of rotation corn supply in various regions increased, and the country's destocking “prologue” gradually opened.

Judging from the change in corn price in some regions and the results of the auction of land storage, the pace of policy grain entry in the market has accelerated in May, and the market has also increased the number of corn purchases. Previously, the market rumored that on May 5, the Central Reserve Branch of Jilin Grain Reserve decided to reduce the price of forest corn rotation from 1750 yuan/ton to 1680 yuan/ton, and implemented a step discount. In the case that the rotation corn occupies the main supply status of the northeast market, the medium grain reserve actively cuts the price, or indicates that the government will increase the destocking intensity.

From the auctions around the Spring Festival, all the auctions of corn storage in some areas in March began to be auctioned; the auction transaction rates in Sichuan and Beijing began to increase in late April, and the average transaction price was lower than the market price; May On the 6th in the Jilin Province, the provincial reserve grain rotation auction sales fair, the corn auction turnover rate was 23.45%, all of which were premium transactions. The above auction results show that the previous government auctions are mostly price ranges acceptable for the test market. As the auction price gradually approaches the market price or even lower than the market price, the market share of the market is decreasing, and the auction transaction rate and transaction volume are increasing.

In addition, it is rumored that a total of 1,592,200 tons of corn has been dumped in Shandong Province, and all sales contracts have been signed. The average selling price is 1,628 yuan/ton, while the sales of corn in Guangdong in 2013 have reached more than 80%. There are also some traders in the enterprise. Given the high pressure on the country to destock and the low inventory of the company, it is expected that the rhythm of corn rotation in various regions will continue to accelerate in May.

How does the policy grain increase the supply of the market, and what impact will it have on the current North China corn market? Beginning before and after the Spring Festival, due to the acquisition of temporary storage, it coincided with the large price difference between northeast and north China. North China corn continued to supply most of the domestic market in a period of time, but it was affected by the pessimistic expectations of the market participants and weak demand. The price of corn in North China has not been supported. As can be seen from the chart below, corn prices in North China have shown a downward trend since 2016, with prices falling by a large margin after the Spring Festival. However, after March, the price of corn in North China was generally fluctuated between 1600-1650 yuan/ton, and the short-term bottoming was basically completed in the middle and late April, and then rebounded.

At present, the grassroots surplus grain in North China has been limited, and roughly estimated to be about 20%. Although the price of farmers' low-price reluctance has been alleviated with the previous two price hikes in North China, due to the uneven distribution of grain sources, the tightening of grain sources in individual regions has begun to take shape, and the recent price rebound is largely It is due to the decrease in the amount of business. Affected by this, some enterprises and traders gradually began to change their mindset. The current traders and enterprises have limited stocks. It is expected that the demand for enterprise stocks will increase in May, and the price of North China market will be supported at the bottom.

(Original title: Policy food is actively entering the market, where is the North China corn market going?)