Northeast corn hits bottom and rebounds, futures increase position and rise, will corn continue to rise?

Entering the end of October, the national autumn harvest is coming to an end, and the grain collection and storage work in the main production areas is being carried out in an orderly manner. Recently, corn prices have shown significant regional differentiation due to differences in quantity across regions. North China's high volume corn prices have fallen, while Northeast China's corn prices have rebounded at a low level. Where will corn prices go in the future?

Since the bottom rebound of corn in North China at the end of September, it has been fluctuating upwards for a month. Recently, with the large-scale increase in production in Shandong, the number of vehicles arriving has once again exceeded a thousand, causing a decline in corn prices. At the same time, the Northeast grain source has entered the North China region. On the 25th, there were 1231 units, and on the 26th, it reached 2034 units, setting a record high for the month. However, there has been a slight decrease in these two days, and some traders have shown signs of high shipments. Today (29th) morning, there were still 1320 units received. Although most deep processing enterprises have stable quotations, companies such as Tianli Pharmaceutical, Shouguang Golden Corn, Baolingbao, Zhonggu, and Fuyang Biotechnology have lowered their prices by 10-20 yuan, and Shengtai Pharmaceutical has accumulated a 2 point decline. Pay attention to the future situation of corn production and the import of corn from Northeast China.

Recently, the autumn harvest work in the main grain producing areas of Northeast China is coming to an end, and the pressure on corn production has decreased. In addition, with the continuous decline in corn prices, the reluctance to sell at the grassroots level has increased, and some traders have established inventories, resulting in a rebound in prices in Heilongjiang and driving the improvement of corn prices in Northeast China. On October 29th, companies such as Suihua Xiangyu, Suihua Haotian, Nehe Xiangyu, Qinggang Longfeng, Jingliang Longjiang, Zhaodong Chengfu, as well as Chifeng Yipin, Tongliao Meihua, and Kailu Yuwang in Heilongjiang province raised prices by 10-25 yuan, but Liaoning and Jilin remained stable on the same day.

In terms of Jinzhou Port, the recent port volume has been at a high level, but not as high as mid month, resulting in narrow fluctuations in port acquisition prices. On October 29th, the port transported 24 cars by car, a decrease of 6 cars from yesterday, with a total operating volume of about 38000 tons. The port transported 171 cars by train, with a total operating volume of 10300 tons, and had 4 operating ships. Ports are priced based on quality, with contract grain and self collection as the main options. The mainstream purchase price has been lowered by 5 yuan. Bulk density 700, moisture content 15, mainstream purchase price 2130-2100 yuan/ton; Chao grain with a bulk density of 680 or above and 30 water contents costs 0.835-0.83 yuan; Jinzhou Zhongfu has a moisture content of 15 and a bulk density of 690. The price is 2130 yuan with a ticket, which will be reduced by 10 yuan.

Since October, the continuous high investment in imported corn auctions has put some pressure on the market. On the 29th, the number of genetically modified corn auctions was 502367 tons, with a transaction volume of 198000 tons and a transaction rate of 39%, which was higher than the same period last week but lower than the transaction rate on the 25th.

Recently, the continuously falling corn in Northeast China has finally seen a stabilization and rebound. Is this a signal that corn prices have bottomed out? This year, the market channel inventory is low, the enterprise inventory is low, the demand is recovering, the number of port acquisition entities has increased recently, and the shipping volume remains high. Does this indicate that the corn market is already changing? How do you judge the future price of corn?

For the future market of corn, the editor insists on the original viewpoint unchanged. Although Jilin has not yet been listed on a large scale, the downward trend of corn in Northeast China is expected to end, and after hitting the bottom, there will be a wave of rebound. Corn in North China has changed with the change of vehicle volume. Although it has fallen recently, it is difficult to fall significantly, and it is expected to fluctuate and rise again.

In terms of futures, Dalian corn futures increased positions and rose on Tuesday, with volatile operations, and all contracts closed in red across the board. As of 15:00 closing, the opening price of corn C2501 contract was 2226 yuan/ton, with a high of 2231 yuan/ton and a low of 2220 yuan/ton during the trading session. It closed at 2226 yuan/ton, slightly up 6 yuan from yesterday's settlement price.

Overall, on October 29th, the C2501 contract continued to increase its holdings, with a margin increase of 8681 lots to 867000 lots and a capital inflow of 25.85 million yuan. According to the position report, the total trading volume of C2501 was over 530000 lots, a decrease of 140000 lots from yesterday. Today, the bullish main force increased by 15144 lots, while the bearish main force increased by 13943 lots.

The continuous inflow of funds and the increase in main holdings indicate a high market entry heat, which is expected to continue to operate strongly. However, the bearish main force is still higher than the bullish position, now above 135000 lots, indicating that the bearish main force still holds the initiative and there is relatively high pressure from above.

Internationally, due to the rapid progress of the new corn harvest in the United States, which is significantly faster than normal levels, the market supply is sufficient, and the uncertainty of the US presidential election has also dragged down corn prices. Therefore, Chicago corn futures prices fell for the second consecutive day on Monday. According to the US Department of Agriculture's Export Inspection Weekly, as of the week ending October 24, 2024, the inspection volume of US corn exports was 823664 tons, a decrease of 18% from a week ago. Last week, it was 1001162 tons, but an increase of 52% compared to the same period last year. Among them, the United States shipped 2618 tons of corn to China this week, and 1029 tons of corn to China last week.

As the second largest source of corn imports from China in September, Ukraine's Ministry of Agriculture stated that as of October 28, 2024/25 (starting from July), Ukraine's grain exports were 13.801 million tons, a significant increase from the same period last year. Among them, corn exports were 4.274 million tons, compared to 3.626 million tons in the same period last year.

The recent week's corn market trend is in line with expectations. Especially last Wednesday, the market saw a significant increase, reproducing the situation of one bullish candlestick and multiple bearish candlesticks, indicating that the rebound momentum of corn is relatively strong. Although it has been fluctuating in recent days, it is evident that there is strong support below. On Tuesday, corn fluctuated, with the main contract closing at the same price as the opening price. All corn contracts closed red, showing a pattern of far strength and near weakness.

Recently, there has been a volatile upward trend. From a technical perspective, the daily chart is facing significant pressure at the intersection of the five-day and forty day moving averages. Looking at the weekly chart, the upward momentum is very strong, successfully stabilizing at the ten week moving average. Looking at MACD, it is about to form a low-level golden cross. In the short term, there is significant upward pressure, but in the medium to long term, it remains optimistic.

From a fundamental perspective, with the intensification of corn harvesting and storage work, the purchase of corn is gradually increasing, supply pressure is weakening, market confidence is gradually recovering, grassroots reluctance to sell sentiment is strengthening, and corn demand is improving, all of which make it possible for corn spot prices to run stronger. However, the sales progress at the grassroots level in the future is an important factor affecting corn prices!

From the perspective of the price difference between futures and spot prices, with the strengthening of the market, futures have once again significantly increased their premiums over spot prices, and companies have already made poor profits from hedging. Moreover, in terms of the main continuous contracts, 2250-2280 is an important pressure area, to be cautious of the influx of large amounts of hedging by enterprises, which may cause a decline in the market.

Therefore, for the future market of corn, Xiaochu is still optimistic, but the pressure above is gradually increasing. Pay attention to the pressure situation and make timely adjustments. Personal opinion, for reference only!