Corn and starch: stable adjustment of spot at weekends

Corn spot prices were adjusted steadily over the weekend. The rise and fall of North China and Northeast production areas were mixed. Northern ports remained stable. Futures prices fluctuated on Friday night. For corn, considering that the progress of grain sales is faster than the same period last year, it can be seen from the gathering volume of northern ports and the deep processing to vehicle volume that the pace of farmers' grain sales is slowing down. The maximum supply pressure corresponds to the bottom of the spot market, which may have already appeared. In the later stage, it is expected to gradually shift from passive destocking to active replenishment, and the medium - to long-term upward trend may have been established. Of course, considering that there is still surplus grain in the current production area, and deep processing has accumulated a certain amount of inventory, the ports in the north and south are still high, and the futures price has risen significantly, it is not ruled out that spot prices may drag down the performance of futures prices in the short term. Next, we will pay close attention to the trends of feed breeding enterprises and production area traders. In summary, we hold a cautious bullish view and recommend investors to hold long positions in the early stages.

For starch, the recent narrowing of the starch corn price difference is mainly due to the continued accumulation of industry inventory on the supply and demand side. Considering the sustained low level of by-products and the high starch base, coupled with the expansion of production losses on the market, these factors limit the space for the starch corn price difference to continue to narrow. However, the corn raw material side may have already established an upward trend, and the starch corn price difference is expected to turn towards expansion. In this situation, we hold a cautious bullish view and recommend investors to hold early long positions or starch corn price arbitrage.