Corn: Focus on short-term selling pressure

Summary of viewpoints

Core viewpoint: According to neutral related institutions, Ukraine's corn production for 2025/26 is expected to be 30.5 million tons, an increase of 17% over the previous year, due to the increase in sowing area and yield. Last week, the temperature anomaly in the main corn producing areas of Brazil did not change much compared to previous years, with less precipitation in the central and eastern regions and less precipitation in the southern regions; NOAA predicts that temperatures in Brazil's corn producing states will remain high in the next 6-10 days, with less precipitation in Rio Grande do Sul and less precipitation in Mato Grosso and Parana states in central southern Brazil. The planting progress of a crop of corn in Brazil is 99.6%, slightly faster than last year, and the harvesting progress is 20.9%, slightly slower than last year. The sowing progress of the second crop of corn is 53.6%, slower than last year.

Last week, corn prices showed an upward trend. As of February 28th, the weekly average price of corn in China was 2195 yuan/ton, an increase of 16 yuan/ton compared to the previous month. Looking at different regions, the price of corn in Northeast China first fell and then rose. Some deep processing enterprises have slightly lowered their acquisition prices, and production areas have followed suit with a slight reduction of 5-20 yuan/ton in deep processing prices. But after the price reduction, the number of vehicles for deep processing has decreased. In order to stimulate the arrival of goods, major enterprises have once again raised their purchase prices, and the spot prices in Northeast China have returned to the previous level. The North China region first rose and then fell, but the price range continued to rise. The pace of grain sales by farmers is relatively fast, and the enthusiasm of traders to ship is weak. The effective supply in the market is insufficient, and deep processing enterprises continue to raise prices to promote revenue. With the price increase, grain sources from Northeast China flow into the North China market, and local traders' enthusiasm to ship has increased. The price of corn by deep processing enterprises has been narrowly reduced. The corn prices in the sales area market fluctuated narrowly, with an increase in arrivals from southern ports during the week and a strong wait-and-see sentiment in the market.

Last week, pig prices fluctuated and decreased. On the supply side, there is still a slight upward trend in body weight during the week, with stable body weight being the main factor in many provinces. In some provinces, there is a lack of smooth sales and passive pressure on inventory; On the demand side, the acquisition of slaughter enterprises has been relatively smooth, and with the continuous recovery of market demand, the operating rate has steadily increased slightly. However, there has been no significant improvement in the delivery of goods on the slaughter side, and distributors have been purchasing at lower prices, resulting in limited improvement in the operating rate of enterprises. This week, we will focus on the entry of secondary education, changes in terminal demand, and the scale of market sales. In terms of deep processing, the profit of corn starch processing is still profitable. The operating rate of corn starch enterprises has increased month on month, and the consumption of corn has also increased month on month. Focus on the profit changes and start-up changes of deep processing enterprises in the future.

Overall, the main corn contract showed a high volatility trend last week. On the one hand, as the temperature rises, the pressure on the quantity of grain on the ground gradually increases, and the supply pressure also increases; On the other hand, the market has risen to its previous high point, with significant hedging pressure above; But currently, with the gradual reduction of surplus grain, it is difficult for corn spot prices to drop significantly. Next week, we need to focus on the weather conditions in the production areas, pay attention to changes in the purchase prices of deep processing enterprises, and monitor the progress of grassroots grain sales in the future.

Origin situation: According to neutral related institutions, due to the increase in sowing area and yield, Ukraine's corn production for 2025/26 is expected to be 30.5 million tons, an increase of 17% over the previous year. Last week, the temperature anomaly in the main corn producing areas of Brazil did not change much compared to previous years, with less precipitation in the central and eastern regions and less precipitation in the southern regions; NOAA predicts that temperatures in Brazil's corn producing states will remain high in the next 6-10 days, with less precipitation in Rio Grande do Sul and less precipitation in Mato Grosso and Parana states in central southern Brazil. The planting progress of a crop of corn in Brazil is 99.6%, slightly faster than last year, and the harvesting progress is 20.9%, slightly slower than last year. The sowing progress of the second crop of corn is 53.6%, slower than last year.

Domestic supply: Neutral. Corn prices showed an upward trend last week. As of February 28th, the weekly average price of corn in China was 2195 yuan/ton, an increase of 16 yuan/ton compared to the previous month. Looking at different regions, the price of corn in Northeast China first fell and then rose. Some deep processing enterprises have slightly lowered their acquisition prices, and production areas have followed suit with a slight reduction of 5-20 yuan/ton in deep processing prices. But after the price reduction, the number of vehicles for deep processing has decreased. In order to stimulate the arrival of goods, major enterprises have once again raised their purchase prices, and the spot prices in Northeast China have returned to the previous level. The North China region first rose and then fell, but the price range continued to rise. The pace of grain sales by farmers is relatively fast, and the enthusiasm of traders to ship is weak. The effective supply in the market is insufficient, and deep processing enterprises continue to raise prices to promote revenue. With the price increase, grain sources from Northeast China flow into the North China market, and local traders' enthusiasm to ship has increased. The price of corn by deep processing enterprises has been narrowly reduced. The corn prices in the sales area market fluctuated narrowly, with an increase in arrivals from southern ports during the week and a strong wait-and-see sentiment in the market.

Feed demand: Neutral. Last week, pig prices fluctuated and decreased. On the supply side, there is still a slight upward trend in body weight during the week, with stable body weight being the main factor in many provinces. In some provinces, there is a lack of smooth sales and passive pressure on inventory; On the demand side, the acquisition of slaughter enterprises has been relatively smooth, and with the continuous recovery of market demand, the operating rate has steadily increased slightly. However, there has been no significant improvement in the delivery of goods on the slaughter side, and distributors have been purchasing at lower prices, resulting in limited improvement in the operating rate of enterprises. This week, we will focus on the entry of secondary education, changes in terminal demand, and the scale of market sales.

Deep processing demand: In terms of neutral deep processing, the profit of corn starch processing is still profitable. The operating rate of corn starch enterprises has increased month on month, and the consumption of corn has also 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 241 yuan/ton between jade and wheat. Wheat replacing corn no longer has a price advantage.

Weather situation: Neutral. It is expected that in the next 10 days, from March 3-4, due to the influence of a cold wave, the temperature in the central and eastern regions will drop by 6-10 ℃ from north to south. There will be heavy to heavy snow in the Hetao area of Inner Mongolia, the eastern part of the northwest region, the southern part of North China, and the northern part of the Huang Huai region. It will have a negative impact on the logistics transportation of corn.

Foreign origin situation

United States: Corn Export Situation

On the week of February 28th, the net sales of corn exports from the United States for 2024/2025 were 795000 tons, compared to 1.454 million tons in the previous week, a decrease of 659000 tons compared to the previous week; The total export volume of US corn is 26.567 million tons, with an outstanding sales volume of 22.096 million tons.

US: Situation of US corn exports to China

During the week of February 28th, the United States shipped 1.322 million tons of 2024/2025 corn exports, compared to 1.606 million tons the previous week; The United States shipped 0 million tons of corn to China (mainland region). Last week, it shipped 4000 tons of corn to China, a month on month decrease of 4000 tons. The cumulative sales volume to China was 32000 tons.

US: Net increase in US corn fund

As of the week ending February 28th, the long position of US corn was 428000 lots, an increase of 10200 lots compared to the previous week; Short positions of 74400 lots decreased by 11000 lots compared to last week.

As of the week ending February 28th, the net long position was 359700 lots, an increase of 33500 lots compared to the previous week, indicating an increased willingness to go long. The lowest price of the CBOT corn main contract this week is 480.00 cents per bushel, and the highest price is 505.25 cents per bushel.

Brazil: Corn producing areas expected to experience high temperatures and little rain next week

During the week of February 28th, the temperature anomaly in the main corn producing areas of Brazil remained relatively stable compared to previous years, with less precipitation in the central and eastern regions and less precipitation in the southern regions; NOAA predicts that temperatures in Brazil's corn producing states will remain high in the next 6-10 days, with less precipitation in Rio Grande do Sul and less precipitation in Mato Grosso and Parana states in central southern Brazil.

Brazil: Slow sowing of second crop corn

As of the week of February 28th, the planting progress of corn for the 2024-2025 crop year was 99.6%, slightly faster than last year, and the harvesting progress was 20.9%, slightly slower than last year. The sowing progress of the second crop of corn is 53.6%, slower 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 15.0%, the germination stage accounts for 1.7%, the flowering stage accounts for 7.6%, the filling stage accounts for 26.2%, and the mature stage accounts for 28.7%. The growth and development stage of second crop corn accounts for 64.7%, and the germination stage accounts for 35.2%.

Brazil: Weekly corn exports decrease month on month

According to Anec Brazil's latest estimate, Brazil's corn exports from February 23rd to March 1st amounted to 218500 tons, compared to 235300 tons last week, a decrease of 16800 tons compared to the previous week.

As of February 28th, according to Anec Brazil's latest estimate, Brazil's corn exports are expected to reach 1.2873 million tons in February, compared to 724000 tons in the same month last year, an increase of 563200 tons year-on-year.

As of this week, Brazil's cumulative corn exports for January 2025 were 3.1463 million tons, a decrease of 361200 tons or 10.29% compared to the export of 3.5075 million tons in January of last year.

Import cost: There is a slight advantage in importing corn from the West of the United States

As of February 28th, the arrival cost of Brazilian corn imported within China's quota in July for the second half of the year is around 2138 yuan/ton, while the arrival cost of Meiwan corn in March is around 2258 yuan/ton; The cost of the March shipment of corn from the western United States to the port is around 2208 yuan/ton; The transaction price of bulk grain at Shekou Port is 2280 yuan/ton, with a slight advantage in importing corn from the western United States.

Domestic supply and demand situation

Weather: Pay attention to short-term heavy snowfall weather

As of the week of February 28th, temperatures in eastern Inner Mongolia, most parts of Northeast China, southeastern parts of North China, northern and central parts of the Huang Huai region, most parts of the Jianghuai region, eastern parts of Jianghan, western and northern parts of Jiangnan, and other areas were 2-4 ℃ higher than usual. Temperatures in most agricultural areas across the country were close to or higher than the same period of the year. Most of the central and eastern regions have precipitation of less than 10 millimeters or no precipitation, which is 30-90% less. Overall, most of the northern agricultural areas have higher temperatures, more sunshine, and suitable soil moisture, which is conducive to the greening and upgrading of winter wheat seedlings, as well as the transportation and sales of corn after the holiday.

It is expected that in the next 10 days, from March 3-4, the temperature in the central and eastern regions will decrease by 6-10 ℃ from north to south due to the influence of a cold wave. There will be heavy to heavy snow in the Hetao area of Inner Mongolia, the eastern part of the northwest region, the southern part of North China, and the northern part of the Huang Huai region. It will have a negative impact on the logistics transportation of corn.

Port inventory: North Port inventory increased month on month

As of the week of February 28th, the corn inventory in the four northern ports totaled 4.805 million tons, an increase of 284000 tons compared to the previous week.

Last week, the price of corn at the port fluctuated narrowly. The surplus grain at the grassroots level in the production area has decreased, and farmers are reluctant to sell at high prices. As a result, the morning port arrivals have slightly decreased, with contracted grain being the main source of goods.

Port inventory: Guangdong Port corn inventory decreased month on month

As of the week of February 28th, the total inventory of corn in Guangdong Port's domestic and foreign trade was 1.405 million tons, a decrease of 65000 tons compared to the previous week's 1.47 million tons. Among them, the domestic corn inventory in Guangdong Port totaled 1.405 million tons, a decrease of 62000 tons from last week; Foreign trade inventory is 0 million tons, unchanged from last week.

Feed demand: breeding profits have fallen slightly

As of the week of February 28th, the average price of live pigs sold nationwide was 14.64 yuan/kg, a decrease of 0.03 yuan/kg from last week, a month on month decrease of 0.20%, and a year-on-year increase of 6.94%. In terms of breeding profits, the profit from self breeding and self raising was 43.08 yuan/head, while the profit from purchasing piglets was 9.39 yuan/head, indicating a slight decline in breeding profits.

Last week, pig prices fluctuated and decreased. On the supply side, there is still a slight upward trend in body weight during the week, with stable body weight being the main factor in many provinces. In some provinces, there is a lack of smooth sales and passive pressure on inventory; On the demand side, the acquisition of slaughter enterprises has been relatively smooth, and with the continuous recovery of market demand, the operating rate has steadily increased slightly. However, there has been no significant improvement in the delivery of goods on the slaughter side, and distributors have been purchasing at lower prices, resulting in limited improvement in the operating rate of enterprises. This week, we will focus on the entry of secondary education, changes in terminal demand, and the scale of market sales.

Feed demand: Profit situation of poultry farming

As of the week ending February 28th, the weekly breeding profit for free range chickens was -3.28 yuan per chicken, an increase of 0.74 yuan per chicken from the previous week's -4.02 yuan per chicken. The weekly breeding profit for laying hens was 5.75 yuan per egg, an increase of 13.29 yuan per egg from last week.

Last week, broiler farming continued to incur losses. On the one hand, the current price of broiler chickens is still at an unreasonably low level, making it difficult to cover the cost of breeding; Secondly, the problem of chicken diseases has not been fully resolved, which still occasionally lowers breeding profits; Finally, feed prices continue to rise, putting pressure on the breeding industry from multiple angles. In terms of laying hens, egg prices have risen strongly. At the beginning of the week, egg prices in many places fell below the opening price after the new year, and breeding units are gradually showing reluctance to sell. In addition, traders' bullish sentiment towards the future market has increased their enthusiasm for purchasing, driving egg prices to continue rising. Due to the month on month increase in the average price of eggs last week, the profit of laying hens has also risen synchronously.

Feed enterprise inventory: inventory days increase month on month

As of the week ending February 28th, the average corn inventory of sample feed companies was 32.07 days, an increase of 0.93 days from last week, a month on month increase of 2.99%, and a year-on-year increase of 9.04%.

Industrial demand: Profit situation of corn starch processing enterprises

As of the week of February 28th, the profit from deep processing of corn starch in Jilin was 11 yuan/ton, a decrease of 18 yuan/ton from last week, while the profit from deep processing of corn starch in Shandong was -39 yuan/ton, a decrease of 49 yuan/ton from last week; The profit from deep processing of corn starch in Heilongjiang was 68 yuan/ton, a decrease of 7 yuan/ton from last week. The profit from deep processing of corn starch in Hebei was 36 yuan/ton, a decrease of 10 yuan/ton compared to the previous period.

Overall, with the progress of grain sales, the supply of corn has temporarily decreased, corn prices have stopped falling and rebounded, and the rise in cost side prices has suppressed processing profits.

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

As of the week of February 28th, the starch start-up rate of the enterprise was 66.27%, an increase of 3.87% compared to the previous week.

Industrial demand: Consumption of deep processing enterprises increases month on month

As of the week of February 28th, a total of 1.2847 million tons of corn were consumed by 126 major corn deep processing enterprises nationwide, an increase of 28100 tons compared to the previous week. Among them, corn starch processing enterprises consumed 675000 tons of corn, an increase of 28100 tons compared to last week; Amino acid enterprises consumed 212000 tons, unchanged from last week; Alcohol companies consumed 397700 tons, unchanged from last week.

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

As of the week of February 28th, the corn inventory of 96 deep processing enterprises was 5.169 million tons, an increase of 5.62%.

Last week, the inventory level of corn in deep processing enterprises across the country continued to rise. The arrival volume of deep processing enterprises in Northeast China has decreased compared to last week, while the overall inventory has remained stable with an effective increase. The price of corn in deep processing enterprises in North China has increased significantly, and traders have started to ship. The supply of goods from Northeast China has also begun to flow in, and inventory levels are showing an increasing trend.

Industrial demand: Downstream deep processing morning to vehicle volume increases month on month

As of the week of February 28th, the total number of vehicles processed by Shandong's deep processing industry reached 3562, an increase of 411 vehicles or 13.04% compared to the previous week's 3151 vehicles.

Last week, the number of vehicles received in front of the deep processing doors increased compared to the previous week, due to the gradual expansion of purchasing and sales activities after the year, which were active. In addition, the price increase of deep processing products promoted revenue, resulting in a significant increase in the number of vehicles received. Focus on the profit changes and acquisition prices of deep processing enterprises in the future.

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

As of the week of February 28th, the price of corn starch was 2793 yuan/ton, a decrease of -4 compared to the previous week; The price of corn germ meal was 1510 yuan/ton, unchanged from the previous month; The price of corn protein powder is 4200 yuan/ton, unchanged from the previous month; The price of corn bran was 820 yuan/ton, unchanged from the previous month.

Last week, the corn by-products - various varieties had different trends, and the overall trading situation was poor, mainly due to weak market conditions. Soybean meal spot prices fluctuated strongly last week, but their actual support for corn protein powder was limited. The market lacks confidence in the future market. Corn fiber received feedback from companies last week that there was an increase in signed orders, coupled with tight inventory in some areas, causing prices to stabilize and stop falling.

Starch demand: downstream operating rate of corn starch

As of the week of February 28th, the operating rate of F55 fruit glucose syrup was 46.48%, an increase of 6.5 percentage points compared to last week. Overall, the production of fruit glucose syrup is still recovering recently, but the overall recovery is slowing down; The operating rate of malt syrup was 52.54%, an increase of 13.2 percentage points compared to last week. The market operating rate has basically returned to normal, and the enterprise operating rate has reached normal levels; The operating rate of corrugated paper was 65.33%, an increase of 3.9% compared to last week; The operating rate of cardboard was 66.66%, an increase of 2.68% compared to last week.

Basis situation: corn spot price and basis trend

As of February 28th, the average spot price of corn was reported at 2207 yuan/ton, and the basis price of corn was reported at -113 yuan/ton.

In terms of basis, the corn basis fluctuated last week. The spot price of corn has increased significantly; On the market side, the main corn contracts tend to be strong and volatile; Therefore, the basis oscillates and runs. It is expected that the market will continue to maintain a high volatility trend in the future, and the basis may continue to fluctuate weakly.

Price difference situation: Corn price difference situation

As of the week of February 28th, the price difference structure of corn futures was 2505 with a discount of 2509.

September is a period when traditional corn is not in season, with less supply and demand pressure, and demand is at a critical point of improvement. Therefore, the price performance is relatively strong compared to May, so 2505 is discounted by 2509. It is expected that the monthly spread will continue to face obstacles and decline in the later period, approaching the previous high level.

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

As of February 28th, the average price of wheat market is 2448 yuan/ton, and the average price of corn market is 2207 yuan/ton. The price difference between wheat and corn is 241 yuan/ton, an increase of 14 yuan/ton compared to last week. The price difference between jade and wheat is greater than 200 yuan/ton, and there is basically no advantage for wheat to ｒｅｐｌａｃｅ corn.

Last week, wheat prices fluctuated upwards, and the market was actively buying and selling. The continuous rise in corn prices and the emergence of wheat as a substitute for feed have attracted some feed factories to purchase; The sentiment of reluctance to sell wheat has risen on a large scale, and the amount of grain on the factories of grain consuming enterprises has decreased, which can only attract grain sources by raising prices. In addition, the low inventory of raw grains in flour mills, the increased enthusiasm for replenishing urgently needed stocks, the increased enthusiasm for two-way purchasing and sales by China Grain Reserves Corporation, the reduced supply of imported grain sources, and the rise in international wheat prices have all contributed to the increase in wheat prices.

Customs data shows that China's wheat imports in December were only 140000 tons, a year-on-year decrease of about 74.5%. The total import volume of wheat from January to December 2024 is estimated to be 11.01 million tons, a year-on-year decrease of about 8%.

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

As of February 28th, 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. The overall supply and demand remain in a tight balance state, and the ending inventory has significantly decreased compared to last year, but still maintains a loose expectation.