Loose supply side corn market waiting for bullish drivers

External market: As of the week ending November 8, 2024, global corn prices have fluctuated upwards, with Chicago corn futures closing up about 4% in the benchmark period, reaching its highest level in four months. This is due to a larger than expected decline in US corn production, weakened seasonal harvest pressure, continued strong demand for US corn, and stronger international crude oil. As of last Friday (November 8th), the Chicago Board of Trade (CBOT) December corn futures closed at approximately $4.31 per bushel, up 4.0% from a week ago; The spot price of No. 2 yellow corn for the November shipping schedule in Meiwan is $5.195 per bushel, up 2.9%. The USDA November supply and demand report has been released, indicating a decrease in US corn production for 24/25 and the corn harvest entering its final stage. If US corn exports remain active, the US Department of Agriculture will increase its export targets and reduce its ending inventory in the future.

Spot goods: This week, the temperature in the main production areas of China is relatively high, causing mold growth and moisture regain in wet grains, making it difficult to store. Grain holders are actively shipping, and aged goods are also continuously being released from the market. Corn production continues to be high, and the number of direct warehouses of China Grain Reserves Corporation entering the market is increasing. Traders are relatively cautious in building warehouses, and grain consuming enterprises also have a demand for replenishment. Due to the impact of production, corn prices are adjusted narrowly and weakly.

Futures: Domestic corn futures prices have fluctuated downward this week, mainly due to the completion of new crop harvesting work in major domestic production areas. Some growers have increased their enthusiasm for selling grain, and the overall supply of grain in the market is loose. Traders and grain consuming enterprises are cautious about purchasing, and supply pressure is slowly increasing. The corn market continues to be under pressure. As of last Friday (November 8th), the opening price of C2501 contract was 2225 yuan, the highest price was 2230 yuan, the lowest price was 2193 yuan, and the closing price was 2199 yuan, with a weekly decline of 1.83%. Ending two consecutive weeks of upward trend.

Overall, the strong export sales data constitutes a clear bullish support, with CBOT corn hitting a new high in nearly a month. The November US agricultural supply and demand report showed a bullish trend, and the short-term bottom support for US corn is strong, still fluctuating around 400 cents per bushel. The pressure on corn production in the main production areas of China is still high, and the temperature in the production areas is relatively high compared to the same period last year. Sales pressure still needs time to be released, while corn harvesting and storage continue to advance. The impact of imported grains has decreased year-on-year, and the advantage of wheat substitution has weakened. The advantage of feed corn is obvious, and demand is expected to continue to improve. Therefore, it is expected that there will be no significant increase in short-term demand, and even the corn market will adjust in stages, so the possibility of further decline is low, waiting for bullish drivers.