Potential pressure on corn imports still exists, starch inventory pressure is not significant

Industry News

1. The Brazilian National Commodity Supply Company (CONAB) stated that as of December 22, 77.9% of the first season corn planting for 2024/25 has been completed, compared to 75.0% a week ago and 75.5% in the same period last year.

Summary of Viewpoints (Corn)

The advantage of international corn prices over the domestic market still exists, and there is still potential pressure on imports. However, there are still certain restrictions on the policy side, and short-term import pressure is relatively weak. Domestically, the progress of grassroots corn sales in Northeast China continues to advance, and there is still a large amount of wet grain to be digested. Traders are slow to deliver goods and maintain procurement based on contract orders, with a small amount of high-quality grain sources stored in warehouses. Processing enterprises have a loose supply of goods, and some deep processing enterprises are actively building warehouses, while livestock breeding enterprises urgently need to replenish their warehouses, resulting in weak support for corn prices. Small and medium-sized traders in the Huanghuai production area of North China continue to be cautious and follow their orders. Deep processing enterprises are affected by local environmental policies, and their operating rates have slightly declined. Feed enterprises have stocking needs before the year, and they mainly focus on selecting and replenishing inventory in small quantities.

Overall, the circulation of corn at the grassroots level is loose, and traders can buy and sell as they go. The effective supply in the market is relatively sufficient, and the arrival volume of deep processing enterprises remains at a high level. Corn prices are weakly adjusted. Looking at the market, corn is expected to remain at a low level and fluctuate, with a short-term wait-and-see approach.

Summary of viewpoints (starch)

In the new season of corn market, the supply of raw materials is loose, coupled with the improvement of industry profits, the operating rate of the corn starch industry remains high, and the output pressure increases. Meanwhile, the weak spot price of corn has dragged down the simultaneous decline of corn starch spot prices. However, the downstream delivery volume before New Year's Day and Spring Festival is still acceptable, and in addition, some corn starch enterprises in certain regions have reduced production and maintenance supply, resulting in little inventory pressure in the corn starch industry. As of December 25th, the total starch inventory of corn starch enterprises in China was 879000 tons, an increase of 1000 tons from last week, a weekly increase of 0.11%, and a monthly decrease of 2.12%; The year-on-year growth rate is 27.76%. From the perspective of the market, the futures price has rebounded in the short term after falling to a low level, and short-term participation is the main trend.

Key focus

Thursday and Friday Mysteel corn weekly consumption and starch enterprise start-up and inventory situation