Corn prices still have temporary room for recovery

Since late September, new season corn has been launched in production areas, and there is still a surplus of aged grain. The overall enthusiasm of grain holders for shipment is high. However, as we enter the fourth quarter, corn prices are at a seasonal low point and have entered a state of transition from new to aged grain sources. The overall supply pressure will further become prominent. At present, the moisture content of newly produced corn is generally high, making it difficult to meet the demand for feed. Some feed and breeding enterprises still focus on maintaining the purchase of aged corn for basic needs, which weakens the support for the price of new season corn. Traders have a weak willingness to build warehouses and mainly rely on buying as needed. In the short term, corn prices may continue to be under pressure.

The new season corn in the Northeast production area is in the early stage of listing, with overall low opening prices, and will enter the peak period of listing in mid October. Both old and new grains will be supplied to the corn market simultaneously, and some growers holding high-quality grain sources may have some reluctance to sell. However, the overall supply of corn in the market is still relatively strong. Grassroots farmers in the North China production area also have a reluctance to sell and are busy with autumn harvest. As a result, the supply of corn grain has decreased, and downstream enterprises have also reduced their delivery volume. They have adjusted their quotations narrowly based on demand consumption, and corn prices have shown a temporary stable trend.

Recently, wheat prices have shown an upward trend, and the main grain holders in the wheat market have been affected by the autumn grain market, showing a strong cautious wait-and-see attitude. Market supply is tightening, and downstream enterprises have reduced their delivery volume, which is not enough to maintain production. As a result, the price of wheat has been raised narrowly, and the substitution effect of wheat has weakened. However, the overall inventory base of wheat is still relatively high, and the possibility of weak prices in the future is still high. The substitution effect of corn may be strengthened.

According to statistics, as of October 12th, a feed enterprise in Yinan County, Shandong Province, has purchased new corn with a moisture content of 14% to 16%, a bulk density of 710g/L, and mold growth of less than 2% at a settlement price of around 2130 yuan/ton; The settlement price for purchasing new wheat with a moisture content of 12.5% to 14%, a bulk density of 760g/L, and mold growth within 2% is around 2450 yuan/ton.

The current domestic temperature is gradually decreasing, making it difficult to store new season corn grains and continuously filling the corn market. The corn supply is sufficient, and processing enterprises maintain a strong demand for grain procurement. There is no plan to build a large number of warehouses, and some regions directly purchase warehouses to support corn prices. However, the overall pattern of supply exceeding demand in the corn market still exists, and in the short term, corn prices may mainly maintain a weak trend. Special analysts from the Grain and Oil Market Report believe that corn prices may continue to fluctuate at a low level in the fourth quarter. They will continue to pay attention to the positive impact of policies, and there is still room for a brief rebound in corn prices.