Corn and starch futures and spot prices continue to rise

    Corn spot prices have continued to rise since the weekend. After fluctuating on Friday night, they opened high and then fluctuated on the day, continuing to rise throughout the day. For corn, considering that the progress of grain sales is faster than the same period last year, the maximum supply pressure may correspond to the bottom of spot stocks appearing in mid to late December. In the later stage, it is expected to gradually shift from passive destocking to active replenishment, and the medium to long term upward trend may have been established. Of course, considering the significant increase in current futures prices compared to spot prices, it is necessary for spot prices to provide positive feedback. In addition to national policies, direct attention can be paid to the gathering volume of northern ports and the door-to-door delivery volume of deep processing. In summary, we hold a cautious bullish view and recommend investors to hold long positions in the early stages.

    Corn starch spot prices are generally stable, with only a few regions lowering their quotes by 20 yuan/ton. Starch futures prices have followed the rise of corn and closed slightly higher throughout the day, with little change in the price difference between starch and corn. For starch, the recent low volatility of the starch corn price difference is mainly due to the sustained high inventory levels in the industry's supply and demand side. Considering the continued low level of by-products and the high starch basis difference, coupled with the expansion of production losses on the market, these factors limit the space for the starch corn price difference to continue to narrow. However, the corn raw material side may have already established an upward trend, and the starch corn price difference is expected to turn towards expansion. In this situation, we hold a cautious bullish view and recommend investors to hold early long positions or starch corn price arbitrage.