Wheat and corn have begun their final 'battle' before the Spring Festival, but there is no hope of a significant increase

Yesterday, the overall corn market was weak, and the price reduction in Shandong region began to expand. As we said, the market volume continued to increase yesterday. If there is no external pressure in the next two days, the arrival of goods will continue to rise. Enterprises that have just recovered to the era of 1 yuan will fall back one after another. Although the overall situation in Northeast China is stable, the market circulation of grain sources is still sufficient, and there is obvious lack of momentum to continue to rise. After entering the middle of the year, the corn market will also start the final "battle" before the Spring Festival, even if the result is already predetermined!

Since the introduction of new corn into the market, corn prices have continued to decline, and even if there is a rebound, it is difficult to maintain it for a week. Fortunately, the overall progress of grain sales this year is relatively fast, and channel traders have not carried out large-scale "interception". Although it meets the "desire" of enterprises to purchase at low prices, it has also greatly reduced the confidence of traders and growers, especially grassroots growers. At this stage, it can be said that there are "complaints" and there is only one opportunity to counterattack. However, personally, I believe that the possibility of this happening in March or April after the New Year is unlikely!

However, as mentioned in the previous article, with the current high volume situation, it will greatly alleviate the pressure of concentrated monetization before the Spring Festival. Therefore, even if the arrival in Shandong rises again and prices begin to fall, the bottom line has become increasingly firm. Now it can be said that the bottom line has been built. The editor does not deny that there are reasons why companies have to suppress prices this year, especially the continuous weak downstream demand, which has greatly compressed the profit space of enterprises to a large extent, but also caused a lack of "interception" effect in the market, and neither supply nor demand side has gained much advantage!

From the perspective of partitioning:

There are not many options for traders in North China and mountainous areas this year, and the vast majority adopt the principle of immediate purchase and sale. The advantage of "small profits, quick sales" is really making a "tea money". But there are a few points that traders in North China and Shandong need to pay attention to:

1. At present, dry or feed grains are scarce, and their prices will be even higher after the New Year. There is a clear profit margin for buying at the bottom at this stage, but there are not many who actually buy stocks!

2. The number of grassroots grain sources is still not small, but the proportion of choosing to ship before the Spring Festival is significantly decreasing. The fundamental reason is the price issue. Before the Spring Festival, the market circulation of grain sources will change rapidly, and the frequency of price fluctuations will increase!

3. Northeast grain will not enter the country on a large scale until at least March or April, but local grain from North China and Shandong will flow to the southern sales areas. There may be a shortage of supply in North China and Shandong in the middle and later stages of the year!

Regarding the issue of surplus transfer, there is definitely a problem, and the quantity is more than everyone thinks. After all, the channel of aged grain has always existed, and even now there are 2022 and 2023 grain sources, mainly concentrated in the Northeast region. As for official inventory, don't ask, just ask if it is full. Just pay attention to the amount of investment. According to publicly available data, the total amount of surplus transfer exceeds 10 million tons, and how much will eventually flow into the market is still an unknown number! At least until more than 80% of the new grain is consumed, I personally believe that the authorities will not open the floodgates on a large scale!

For the Northeast, there is more good news than bad news. First, the weather is awesome. Judging from the current temperature, even the grain on the ground can be saved. In addition, recently channel traders have begun to take an active part. Some small and medium-sized traders in many regions have started to take the initiative to buy at the grass-roots level, and even a small bidding situation has emerged. The possibility of major changes in the Northeast before the Spring Festival is getting lower and lower. Even if there is a concentrated increase in the middle of the year, the demand of enterprises will be stimulated!

If the rise is the self repair of the market after oversold, then entering this week is the real supply-demand game. Enterprises have a certain demand for replenishing inventory or stocking up, and grain holders also have considerations for withdrawing funds. The supply and demand sides still have to fight, even if the outcome is predetermined. In such a situation, in the short term, the corn market before the year is still dominated by upward fluctuations! At present, the price of corn is basically at the bottom position, and the space for further decline may be limited. However, with favorable factors still needing to ferment, it is also difficult to rise!

Summary: Recently, there will be frequent fluctuations in enterprise prices, with the main reference point being the delivery situation of enterprises. After all, the vast majority of people cannot research the sales situation of various regions. Although the general trend of corn prices has become clear after entering this month, due to various factors, Shandong enterprises are likely to maintain a price of around 2100-2300 yuan/ton before the Spring Festival, and the overall price in Northeast China will remain between 2000-2100 yuan/ton. However, the cyclical changes this month will be more obvious. Although the purchasing side still dominates, with the decrease in temperature, there will also be new changes in prices. In the future, we will focus on weather changes, policy collection and storage situation, and enterprise start-up and stocking situation!

As for the demand for feed, although there has been a rebound, it falls short of expectations and has little effect on the current rise in new corn prices! Although the possibility of a significant increase in corn prices has been basically cut off before the Spring Festival, the editor believes that the opportunity for corn will be from June to September after the New Year. The main reason for this judgment is that the progress of grain sales this year is relatively fast, and there may be temporary supply shortages in the later stage. Although it is difficult to reproduce the peak, it will at least be 100-200 yuan/ton higher than the current price!

Starting from yesterday, the wheat market has experienced a widespread decline, even with two drops per day. This is what we were worried about earlier, as grain holding entities have significantly accelerated their shipments, and the psychological warfare of enterprises is truly playing "6". However, the possibility of a repeat oversold is unlikely, as we are getting closer to the Spring Festival and everyone is starting to stabilize. The supply and demand sides have reached a "strange" tacit understanding. Although there has been an increase in volume, a new round of grain sales has not yet formed. In the coming week, we need to pay attention to the circulation of market goods. The editor needs to reiterate that the current shipment is not a good time. Pay attention to the auction of China National Grain Reserves Corporation. The editor suggests that everyone pay more attention to the transaction price, delivery cycle, grain source years, and transaction situation. Before the policy collection and storage stops, the fluctuation range of wheat is within a controllable range. However, periodic shipments will occur frequently, and the game between supply and demand sides will not fundamentally change in the short term!

After entering this month, the purchase and sales of downstream flour have rebounded, and enterprises are facing the demand for replenishing inventory. Even if the bran market is under pressure, there is still profit margin for enterprises. Although the overall market situation is oversupply and the market presents a "double empty" situation, the short-term wheat spot may continue the weak and stable adjustment trend. However, with the emergence of the premium of China National Grain Reserves Corporation, it has played a good role in helping. This month's focus should still be on the situation of grain source entering the market and downstream procurement situation! The overall trend of the wheat market is bound to fluctuate and fluctuate before the Spring Festival, but the probability of a stage market situation will decrease, and the biggest variable is the stocking cycle of flour milling enterprises before and after the Spring Festival! With the passage of time, the confidence of grain holders in wheat has also been restored!