How did corn prices end before the end of the year when there were frequent positive news and prices remained unchanged?

As the end of the year approaches, various favorable news has been frequently reported in the corn market, but domestic corn prices seem to be turning a deaf ear to these positive news. After a good start at the beginning of the month, the trend of low-level consolidation has continued. As the Spring Festival approaches, can corn prices rise, and how will corn prices close before the New Year?

Corn prices continue to show a weak trend after the New Year

Recently, for the corn market, there have been frequent positive news, such as reduced imports, multiple regions collecting and storing, the fastest progress in grain sales in 6 years, and institutions predicting a slight increase in demand in 25 years. However, faced with numerous positive news, except for a good start at the beginning of the month, it still went its own way and did not show a clear upward trend.

As of January 7th, the average price of corn nationwide was 2010 yuan/ton, a decrease of 2% month on month and 17% year-on-year.

From the perspective of the Northeast region, there is still a demand for grain sales among grassroots farmers in recent times. However, with the end of stocking by downstream feed enterprises in the south before the new year, the demand for the export of corn from Northeast China has decreased, and the willingness of port traders to purchase has decreased, which in turn has slowed down the speed of grain supply from production areas. In terms of deep processing enterprises in Northeast China, the current inventory of raw corn is relatively sufficient, and many enterprises maintain on-demand replenishment, which provides insufficient support for the price of corn in Northeast China. Since the beginning of the month, the mainstream price of corn in Northeast China has remained stable, with some areas in Heilongjiang and Jilin experiencing a slight decrease of 10 yuan/ton.

From the perspective of North China region, at the beginning of the month, as the arrival of corn by deep processing enterprises decreased, most enterprises adopted the method of raising prices to attract sources of goods, and the mainstream price increased by 20-40 yuan/ton. But due to the unwavering enthusiasm of grassroots traders for shipping, the amount of goods received was quickly replenished. With the increase in the number of vehicles arriving, deep processing enterprises have once again lowered prices for acquisitions. As of January 7th, compared with the beginning of the month, the average purchase price of corn for deep processing enterprises in Shandong Province was 2045 yuan/ton, a slight increase of 10 yuan/ton from the beginning of the month.

According to local information, the average inventory days of feed enterprises in North China are currently 20-30 days, and the demand for replenishment is limited; While the willingness of traders to ship remains high, the digestion capacity of deep processing enterprises is limited, so the supply of trendy grains is still relatively loose.

How did corn prices end before the New Year?

Before and after New Year's Day every year, there is a habit of stocking up on feed in the south, which in turn drives up the price of corn.

According to the research results of the institution, the corn inventory of most southern feed enterprises has been stocked until the end of February and early March. Although some small enterprises and breeders still have stocking needs, the demand is relatively low. This means that the pre year stocking market for feed companies has come to an end. In addition, before the Spring Festival, it is also a concentrated period for the slaughter of pigs and various poultry agricultural products, which creates a negative demand for raw material corn.

In addition, there is an expectation of a decrease in the operating load of deep processing enterprises such as corn starch and ethanol before the Spring Festival, which is unfavorable for corn consumption.

Therefore, both breeding and deep processing enterprises have expectations of a decrease in the consumption of raw material corn, which has a negative impact on domestic corn prices.

Taking into account the above factors, before the Spring Festival, the enthusiasm for shipping in the trade sector did not decrease, while the enthusiasm and consumption of raw material corn in downstream sectors showed a downward trend. Therefore, it is difficult for corn prices to rebound before the Spring Festival, and the mainstream price of corn will remain stable. Some regions may experience a downward trend due to difficulties in selling, but the expected decline is limited, ranging from 10-30 yuan/ton.

In addition, with the tightening of policies and the decrease in imports of corn and substitutes, it is expected that the bottom of domestic corn prices is gradually forming, and January is likely to be the lowest point of domestic corn prices in the 25th year.