Corn: The effect of increasing storage remains to be observed

Summary of viewpoints

Core viewpoint: According to the neutral Ukrainian Ministry of Agriculture, as of November 27, the grain export volume of Ukraine in 2024/25 was 17.764 million tons, higher than 16.803 million tons a week ago and an increase of 5.07 million tons or 40.0% from 12.693 million tons in the same period last year; The export volume of corn is 6.886 million tons. Last week, the temperature anomaly in the main corn producing areas of Brazil was relatively high, with less precipitation in the central region compared to previous years and less precipitation in the southern region. This week, it is expected that the temperature in the main corn producing areas of Brazil will still be high, with more precipitation in Rio Grande do Sul and more precipitation in the central corn producing states of Mato Grosso and Parana. The planting rate of corn in Brazil for the year 24/25 was 58.7%, which was faster than the previous year. As of November 29th, the corn harvest in the United States has basically ended.

Last week, the national corn prices were consolidating, with a weekly average price of 2164 yuan/ton, an increase of 2 yuan/ton compared to the previous week. Looking at different regions, stability is the main focus in Northeast China, and rainy and snowy weather affects circulation, resulting in limited deliveries in front of businesses. North China first rose and then fell, with a decrease in door-to-door arrivals during the cooling and rainy weather at the beginning of the week. After the rain stopped, arrivals quickly recovered; Grassroots procurement is average, and there is a weak willingness to store grain. The sales area is relatively weak, with a significant increase in arrivals from southern ports, a slowdown in downstream pickup, an increase in port inventory, and low pre-sale order transactions.

Last week, pig prices fluctuated narrowly, with a significant increase in weekly center of gravity. On the supply side, the overall output of pigs from free range households is not large, and the weight changes of pig sources in the market are mostly influenced by the pace of pig production in large-scale farms. Subsequently, market expectations have decreased, and there is a coexistence of early slaughter of large pigs in northern group farms and weight reduction of pigs in southern farms; On the demand side, with snowfall and rainfall in some areas during the week, the demand for terminals and cured meat has increased. In addition, some companies have increased their operating rates to meet their annual sales plans. The demand for frozen products in the market is still relatively flat, with poor market transactions, slow delivery of frozen products by slaughter enterprises, and little fluctuation in storage capacity. In terms of deep processing, the profit of corn starch processing has improved, the operating rate of corn starch enterprises has increased month on month, and the consumption of corn has increased month on month. Focus on the profit changes and start-up changes of deep processing enterprises in the future.

Overall, last week's corn main contract fluctuated weakly. On the one hand, the overall temperature has been relatively high since the beginning of winter this year. Due to the fact that corn sales are still dominated by trendy grains and traders have a weak willingness to store grain, the overall supply of corn in North China remains relatively loose; On the other hand, the increase in storage announced last week did not stimulate weak market sentiment, and the overall actual acquisition and storage volume may be lower than expected. Therefore, overall, the 2501 contract showed a fluctuating and weak trend last week. This week, we need to focus on the acquisition prices of deep processing enterprises and the situation of grassroots production, pay attention to the actual increase in storage and inventory, and pay attention to the progress of grassroots grain sales and weather changes in the future.

Origin situation: According to the neutral Ukrainian Ministry of Agriculture, as of November 27, the grain export volume of Ukraine in 2024/25 was 17.764 million tons, higher than 16.803 million tons a week ago and an increase of 5.07 million tons or 40.0% compared to the same period last year's 12.693 million tons; The export volume of corn is 6.886 million tons. Last week, the temperature anomaly in the main corn producing areas of Brazil was relatively high, with less precipitation in the central region compared to previous years and less precipitation in the southern region. This week, it is expected that the temperature in the main corn producing areas of Brazil will still be high, with more precipitation in Rio Grande do Sul and more precipitation in the central corn producing states of Mato Grosso and Parana. The planting rate of corn in Brazil for the year 24/25 was 58.7%, which was faster than the previous year. As of November 29th, the corn harvest in the United States has basically ended.

Domestic supply: Neutral. Last week, the national corn prices were consolidating, with a weekly average price of 2164 yuan/ton, an increase of 2 yuan/ton compared to the previous week. Looking at different regions, stability is the main focus in Northeast China, and rainy and snowy weather affects circulation, resulting in limited deliveries in front of businesses. North China first rose and then fell, with a decrease in door-to-door arrivals during the cooling and rainy weather at the beginning of the week. After the rain stopped, arrivals quickly recovered; Grassroots procurement is average, and there is a weak willingness to store grain. The sales area is relatively weak, with a significant increase in arrivals from southern ports, a slowdown in downstream pickup, an increase in port inventory, and low pre-sale order transactions.

Feed demand: bearish. Last week, pig prices fluctuated narrowly, and the weekly center of gravity showed a significant upward trend. On the supply side, the overall output of pigs from free range households is not large, and the weight changes of pig sources in the market are mostly influenced by the pace of pig production in large-scale farms. Subsequently, market expectations have decreased, and there is a coexistence of early slaughter of large pigs in northern group farms and weight reduction of pigs in southern farms; On the demand side, with snowfall and rainfall in some areas during the week, the demand for terminals and cured meat has increased. In addition, some companies have increased their operating rates to meet their annual sales plans. The demand for frozen products in the market is still relatively flat, with poor market transactions, slow delivery of frozen products by slaughter enterprises, and little fluctuation in storage capacity.

Deep processing demand: In terms of neutral deep processing, the profit of corn starch processing has improved, the operating rate of corn starch enterprises has increased month on month, and the consumption of corn has increased month on month. Focus on the profit changes and start-up changes of deep processing enterprises in the future.

Alternative situation: In terms of a large number of alternative products, the price of wheat did not change much last week, with a price difference of 289 yuan/ton between wheat and corn. Wheat replacing corn no longer has a price advantage.

Weather conditions: It is expected that strong cold air will affect some areas in Northeast China, central and eastern Inner Mongolia on December 2-3, resulting in a temperature ｄｒｏｐ of 8-10 ℃. Some areas in Northeast China, northeastern Inner Mongolia, and northern Xinjiang will experience light to moderate snow or sleet, with some areas experiencing heavy snow or blizzards. There will also be a cold air wave affecting the central and eastern regions on December 6-8, posing a high risk of snow disasters and low-temperature freezing damage to facility agriculture and animal husbandry production.

Foreign origin situation

United States: Corn Export Situation

On the week of November 29th, the net sales of corn exports for the 2024/2025 fiscal year in the United States were 1.063 million tons, a decrease of 432000 tons from the previous week's 1.495 million tons; The total export volume of US corn is 10.338 million tons, with an outstanding sales volume of 22.121 million tons.

US: Situation of US corn exports to China

On the week of November 29th, 1.011 million tons of 2024/2025 corn exports from the United States were shipped, compared to 957000 tons the previous week; The United States shipped 5000 tons of corn to China (mainland region), and the last week's shipment to China was 0 million tons, an increase of 5000 tons month on month, with a cumulative sales volume of 26000 tons to China.

US: Net increase in US corn fund

As of the week ending November 29th, the long position of US corn was 280400 lots, a decrease of 9500 lots compared to the previous week; Short positions of 165800 lots decreased by 14100 lots compared to last week.

As of the week ending November 29th, the net long position was 107000 lots, an increase of 7300 lots compared to the previous week, indicating an increase in long willingness. The lowest price of the CBOT corn main contract this week was 425.5 cents per bushel, and the highest price was 435.7 cents per bushel.

Brazil: Central corn producing region expected to experience high temperatures and heavy rainfall next week

During the week of November 29th, the temperature anomaly in the main corn producing areas of Brazil was higher than in previous years, with less precipitation in the central and southern regions and less precipitation in the state of Rio Grande do Sul; NOAA predicts that temperatures in Brazil's corn producing states will remain high in the next 6-10 days, with more precipitation in Rio Grande do Sul and more precipitation in Mato Grosso and Parana states in central southern Brazil.

Brazil: New corn sowing too fast

As of the week of November 29th, the progress of planting corn for the 2024-2025 crop year was 58.7%, slightly faster than last year.

According to the national average level weighted by the total sowing area of states such as GO, PI, TO, SP, MG, MA, MS, MT, and PR, the growth and development stage of the new crop of corn accounts for 66.1%, the germination stage accounts for 12.3%, and the flowering part accounts for 18.2%.

Brazil: Weekly corn exports decrease month on month

According to Anec Brazil's latest estimate, Brazil's corn exports from November 24th to November 30th amounted to 1.4709 million tons, compared to 754900 tons last week, a decrease of 716000 tons compared to the previous week.

As of November 29th, according to Anec Brazil's latest estimate, Brazil's corn exports are expected to reach 5098700 tons in November, compared to 6.9959 million tons in the same month last year, a decrease of 1.8971 million tons year-on-year.

As of this week, Brazil's cumulative export of corn from January to October 2024 was 29.15 million tons, a decrease of 10.592 million tons or 30.76% compared to the export of 42.105 million tons from January to October last year.

Import cost: There is a slight advantage in importing corn from Meiwan

As of November 29th, the January shipping cost of imported Brazilian corn within China's quota in the second half of the year is around 2154 yuan/ton, and the January shipping cost of Meiwan corn is around 2060 yuan/ton; The arrival cost of the January shipping schedule for corn in the western United States is around 2052 yuan/ton; The transaction price of bulk grain at Shekou Port is 2270 yuan/ton, with a slight advantage in the import of corn from the western United States in the distant months.

Domestic supply and demand situation

Weather: Pay attention to cooling and snowfall weather

As of the week of November 29th, the temperature in most agricultural areas across the country is close to or 1-4 ℃ lower than the same period of the year; Most areas in eastern Inner Mongolia and northeastern China are 1-4 ℃ higher,. The precipitation in Northeast China, Northeast Inner Mongolia, and Eastern North China ranges from 10 to 50 millimeters. Last week, affected by the cold wave weather process, there was more precipitation and less sunshine in Northeast China and Inner Mongolia. The maximum snow depth in most areas was 1-20 centimeters, and in some areas it reached 20-50 centimeters, which is not conducive to facility agriculture and animal husbandry production. Ground grain is prone to moisture and mold.

It is expected that from December 2nd to 3rd, some areas in Northeast China, central and eastern Inner Mongolia will experience a temperature ｄｒｏｐ of 8-10 ℃ due to strong cold air. Some areas in Northeast China, Northeast China, and northern Xinjiang will have light to moderate snow or sleet, with some areas experiencing heavy snow or blizzards. From 6th to 8th, a cold air will also affect the central and eastern regions, and facility agriculture and animal husbandry production are at high risk of snow disasters and low-temperature freezing damage.

Port inventory: North Port inventory increased month on month

As of the week of November 29th, the total corn inventory in the four northern ports was 4.058 million tons, an increase of 618000 tons compared to the previous week.

Last week, the price of corn at the port fluctuated weakly. At the beginning of the week, the weather was cloudy and rainy, and the road surface was slippery. The port stopped testing, and there were fewer vehicles arriving. Port traders have low enthusiasm for purchasing, and some traders hold small-scale inventory in the early stage.

Port inventory: Guangdong Port corn inventory increased month on month

As of the week of November 29th, the total inventory of corn in Guangdong Port's domestic and foreign trade was 701000 tons, an increase of 186000 tons compared to the previous week's 515000 tons. Among them, the domestic corn inventory in Guangdong Port totaled 653000 tons, an increase of 196000 tons from last week; The foreign trade inventory is 48000 tons, a decrease of 10000 tons from last week.

Feed demand: breeding profits have slightly rebounded

As of the week of November 29th, the average price of live pigs sold nationwide was 16.41 yuan/kg, an increase of 0.28 yuan/kg compared to last week, a month on month increase of 1.74%, and a year-on-year increase of 14.04%. In terms of breeding profits, the profit from self breeding and self raising was 195.78 yuan/head, and the profit from purchasing piglets was -9.98 yuan/head, indicating a rebound in breeding profits.

Last week, pig prices fluctuated narrowly, with a significant increase in weekly center of gravity. On the supply side, the overall output of pigs from free range households is not large, and the weight changes of pig sources in the market are mostly influenced by the pace of pig production in large-scale farms. Subsequently, market expectations have decreased, and there is a coexistence of early slaughter of large pigs in northern group farms and weight reduction of pigs in southern farms; On the demand side, with snowfall and rainfall in some areas during the week, the demand for terminals and cured meat has increased. In addition, some companies have increased their operating rates to meet their annual sales plans. The demand for frozen products in the market is still relatively flat, with poor market transactions, slow delivery of frozen products by slaughter enterprises, and little fluctuation in storage capacity.

Feed demand: Profit situation of poultry farming

As of the week ending November 29th, the weekly breeding profit for free range chickens was -1.58 yuan per chicken, compared to -1.63 yuan per chicken last week, an increase of 0.05 yuan per chicken from the previous week. The weekly breeding profit of parent raised chickens was 1.62 yuan per chicken, compared to 1.67 yuan per chicken last week, a decrease of 0.05 yuan per chicken from last week. The weekly breeding profit of laying hens was 49.33 yuan/egg, a decrease of 1.39 yuan/egg from last week.

Last week, there was a slight loss in broiler farming. The breeding cost continues to remain high, with an average breeding cost of 3.85 yuan/jin last week, especially the average cost of chicken seedlings reaching 4.43 yuan/feather. However, the price of chickens collected by the factory has not changed much, and for most of the time, it has remained at a pre shed price of 3.80 yuan/jin, so the profit and loss of the breeding end is still near the equilibrium line. In terms of laying hens, the egg market saw a narrow upward trend last week. With the temporary bottoming out of egg prices, the market's speculative sentiment heated up, and the enthusiasm of distributors in the low-priced areas for purchasing goods in the second and third batches slightly increased. However, there was no significant improvement in terminal demand, and egg prices tentatively rose slightly during the week. Due to the month on month decline in average prices last week, profits from egg chicken farming continue to shrink.

Feed enterprise inventory: inventory days increase month on month

As of the week of November 29th, the average inventory of corn in sample feed enterprises was 29.21 days, an increase of 0.20 days from last week, a month on month increase of 0.69%, and a year-on-year decrease of 4.20%.

Industrial demand: Profit situation of corn starch processing enterprises

As of the week of November 29th, the profit from deep processing of corn starch in Jilin was 92 yuan/ton, a decrease of 34 yuan/ton from last week, while the profit from deep processing of corn starch in Shandong was 134 yuan/ton, a decrease of 9 yuan/ton from last week; The profit from deep processing of corn starch in Heilongjiang was 103 yuan/ton, a decrease of 21 yuan/ton from last week. The profit from deep processing of corn starch in Hebei is 220 yuan/ton, an increase of 3 yuan/ton from last week.

Overall, the processing profits of major production areas in China are within the profit range. With the successive launch of new grains, the reduction in raw material costs has driven the improvement of corn starch profits.

Industrial demand: The operating rate of deep processing enterprises has increased month on month

As of the week of November 29th, the starch start-up rate of 66 enterprises was 69.36%, an increase of 0.95% compared to last week.

Recently, the profit of the corn starch industry is still in a good operating range, and the start-up rate of some enterprises with insufficient production capacity in the early stage continues to increase. The start-up rate of the entire industry remains high and continues to rise.

Industrial demand: The consumption of deep processing enterprises has increased month on month

As of the week of November 29th, 126 major corn deep processing enterprises in China have consumed a total of 1.2974 million tons of corn, an increase of 33400 tons compared to the previous week. Among them, corn starch processing enterprises consumed 692800 tons of corn, an increase of 7200 tons compared to last week; Amino acid enterprises consumed 209850 tons, a decrease of 1200 tons compared to last week; Alcohol companies consumed 396100 tons, an increase of 27500 tons compared to last week.

Industrial demand: Corn inventory of deep processing enterprises increases month on month

As of the week of November 29th, the corn inventory of 96 deep processing enterprises was 3.689 million tons, a decrease of 3.98% compared to last week.

Last week, the inventory of corn deep processing enterprises slightly decreased, and there was differentiation between regions. The overall arrival volume in Northeast China has decreased compared to last week, but it is still higher than consumption, and inventory levels have slightly increased. Affected by rainy weather, the delivery volume in North China has decreased. Although the delivery volume quickly recovered after the weather cleared up, the overall inventory level has decreased.

Industrial demand: downstream deep processing morning to vehicle volume decreases compared to the previous period

As of the week of November 29th, the total number of vehicles processed by Shandong's deep processing industry reached 5217, a decrease of 770 vehicles or 12.86% compared to the previous week's 5987 vehicles.

Last week, the number of vehicles in front of the deep processing gate decreased compared to the previous week, due to the widespread rain and snow weather that objectively affected the logistics transportation of corn, resulting in a decrease in the quantity of corn. Focus on the profit changes and weather conditions of deep processing enterprises in the future.

Starch demand: price situation of corn starch and by-products

As of the week ending November 29th, the price of corn starch was 2897 yuan/ton, unchanged from the previous week; The price of corn germ meal was 1440 yuan/ton, unchanged from the previous month; Corn protein powder price is 3870 yuan/ton, month on month -120; The price of corn bran was 730 yuan/ton, unchanged from the previous month.

Last week, the market sentiment was not high, and the weekly price of protein powder continued to remain weak. Downstream rolling restocking was the main trend, and the enthusiasm for purchasing goods was not high. Most companies lowered prices to attract transactions; In terms of fiber, the delivery situation is slightly better than that of protein powder, and traders and feed companies mainly rely on rigid replenishment.

Starch demand: downstream operating rate of corn starch

As of the week of November 29th, the operating rate of F55 fruit glucose syrup was 47.26%, an increase of 1.54 percentage points from last week. Recently, there has been pressure on the shipment of fruit glucose syrup, and the company continues to operate at a low level; The operating rate of maltose syrup was 53.63%, a decrease of 0.01 percentage points compared to last week. Recently, the low operating rate of manufacturers has remained stable, with little change in operating rate; The operating rate of corrugated paper was 65.07%, an increase of 0.09% compared to last week; The operating rate of cardboard was 67.14%, an increase of 0.66% compared to last week.

Basis situation: corn spot price and basis trend

As of November 29th, the average spot price of corn was reported at 2160 yuan/ton, and the basis price of corn was reported at -33 yuan/ton.

In terms of basis, the corn basis fluctuated last week. The spot price of corn is mainly stable with little fluctuation; On the market side, the main corn contract fluctuated, with a weekly decline of 1.23%, resulting in a fluctuating basis. It is expected that the market will continue to maintain a volatile trend this week, and the basis may continue to fluctuate weakly.

Price difference situation: Corn price difference situation

As of the week of November 29th, the price difference structure of corn futures is 2501 with a discount of 2505.

Due to the traditional peak period of grain sales before the Spring Festival, there will be a temporary oversupply of corn supply, which will suppress prices in recent months and lead to a decrease in price pressure. In May, the supply of new crops will decrease temporarily, and the supply pressure will relatively ease. Therefore, 2501 will be discounted by 2505. It is expected that the gap between January and May will approach the previous high level or continue to encounter obstacles and decline.

Alternative situation: The price difference between jade and wheat has slightly widened

As of November 29th, the average price of wheat market is 2450 yuan/ton, and the average price of corn market is 2161 yuan/ton. The price difference between wheat and corn is 289 yuan/ton, an increase of 1 yuan/ton compared to last week. The price difference between jade and wheat is greater than 250 yuan/ton, and there is basically no advantage for wheat to ｒｅｐｌａｃｅ corn.

Last week, wheat prices remained stable with weak adjustments, resulting in a stalemate in market purchases and sales. Since the launch of Xinmai, wheat prices have not broken through, and grain holders generally hold a bearish sentiment towards the future market. Recently, the enthusiasm for selling grain has been relatively high. Flour production in flour milling enterprises is relatively slow, with continuous reductions in start-up rates and limited wheat consumption; Continuously lowering procurement prices while maintaining safety stock. Under the game of supply and demand, wheat prices have stopped falling and gradually stabilized.

Customs data shows that China's wheat imports in October were 210000 tons, a year-on-year decrease of about 66%; The total import volume of wheat from January to October was 10.82 million tons, an increase of about 1% year-on-year.

Balance sheet: New production expected to decrease, import volume to decrease year-on-year

As of November 29th, the corn balance sheet has not been significantly adjusted compared to the previous month, and the expected decrease in new production is still maintained, with a decrease of about 7.6 million tons. In addition, with the tightening of import corn policies, it is estimated that the import volume of corn for the new season will be reduced by 3 million tons, and the overall supply and demand will remain in a tight balance state. The ending inventory has significantly decreased compared to last year, but still maintains a loose expectation.