IndustryCorn: Increasing storage opens up again
Core viewpoint: Neutral to bullish. The Ukrainian Ministry of Agriculture stated that as of January 9th, Ukraine's grain exports for 2024/25 amounted to 22.44 million tons, an increase of 3 million tons or 15.5% compared to the same period last year. The export volume of corn was 10.16 million tons, lower than 10.33 million tons in the same period last year. Last week, the temperature anomaly in the main corn producing areas of Brazil was higher than in previous years, with less precipitation in the central region and less precipitation in the southern region compared to previous years. This week, it is expected that the temperature in the main corn producing areas of Brazil will still be high, and there will be less precipitation in Rio Grande do Sul. The precipitation in the central corn producing states of Mato Grosso and Parana in Brazil will not change much from previous years. The planting rate of corn in Brazil for the 24/25 season was 83.7%, slightly faster than last year, and the harvest progress was 1.1%, slightly slower than last year.
Last week, corn prices remained relatively stable. As of January 10th, the weekly average price of corn nationwide was 2091 yuan/ton, unchanged from the previous month. Looking at different regions, the price of corn in Northeast China is stable but slightly weak. Some deep processing enterprises have lowered their purchase prices. In addition, traders have low intentions to build warehouses. Except for sending corn to national storage and local deep processing, the outflow of corn from Northeast China is relatively limited. The price of corn in North China remains volatile and weak, but the decline is limited. After farmers sold their grain in December, the quantity of dry grain increased, and traders' willingness to stock up increased. As the Spring Festival approaches, downstream feed companies have basically completed pre holiday stocking, and some companies have started purchasing gradually within the week, mainly based on long-term signing, with a small amount of low-priced spot purchases and limited demand support.
Last week, pig prices fluctuated narrowly. On the supply side, there has been an increase in the willingness of farmers to sell large pigs within the week, but the overall market supply proportion is limited. The sales of small and large weight pigs remained the same as last week; On the demand side, the cured sausage is in the final stage of the week, with a significant decrease in market demand and further decline in enterprise operating rates; During the week, there was no significant improvement in the demand for frozen products in the market. This week, we will focus on changes in the pace of group market sales, changes in pre holiday consumption, and adjustments to macro consumption policies. In terms of deep processing, the profit of corn starch processing has declined but still remains profitable. The operating rate of corn starch enterprises has increased month on month, and the consumption of corn has decreased month on month. Focus on the profit changes and start-up changes of deep processing enterprises in the future.
Overall, the main corn contract showed a narrow range of fluctuations last week, with a significant increase on Friday. On the one hand, some grain points have started to selectively hold medium - and long-term inventory, and the enthusiasm for market entry and acquisition is gradually increasing; On the other hand, market rumors of increased storage in Northeast China have boosted market confidence to some extent. On Saturday, China National Grain Reserves Corporation announced another increase in storage. Therefore, considering the overall situation, the main contract fluctuated and consolidated at a high level last week, and chose to attack upwards, reaching a maximum of 2262 yuan/ton. This week, we need to focus on whether there are any new positive news released on the policy side, whether the enthusiasm of traders to enter the market for acquisitions has increased, and pay attention to the progress of grassroots grain sales and weather changes in the future.
Origin situation: According to the Ukrainian Ministry of Agriculture, as of January 9th, the grain export volume of Ukraine in 2024/25 was 22.44 million tons, an increase of 3 million tons or 15.5% compared to the same period last year. The export volume of corn was 10.16 million tons, lower than 10.33 million tons in the same period last year. Last week, the temperature anomaly in the main corn producing areas of Brazil was higher than in previous years, with less precipitation in the central region and less precipitation in the southern region compared to previous years. This week, it is expected that the temperature in the main corn producing areas of Brazil will still be high, and there will be less precipitation in Rio Grande do Sul. The precipitation in the central corn producing states of Mato Grosso and Parana in Brazil will not change much from previous years. The planting rate of corn in Brazil for the 24/25 season was 83.7%, slightly faster than last year, and the harvest progress was 1.1%, slightly slower than last year.
Domestic supply: Neutral. Last week, corn prices were basically stable. As of January 10th, the weekly average price of corn in China was 2091 yuan/ton, unchanged from the previous month. Looking at different regions, the price of corn in Northeast China is stable but slightly weak. Some deep processing enterprises have lowered their purchase prices. In addition, traders have low intentions to build warehouses. Except for sending corn to national storage and local deep processing, the outflow of corn from Northeast China is relatively limited. The price of corn in North China remains volatile and weak, but the decline is limited. After farmers sold their grain in December, the quantity of dry grain increased, and traders' willingness to stock up increased. As the Spring Festival approaches, downstream feed companies have basically completed pre holiday stocking, and some companies have started purchasing gradually within the week, mainly based on long-term signing, with a small amount of low-priced spot purchases and limited demand support.
Feed demand: bearish. Last week, pig prices fluctuated narrowly. On the supply side, there has been an increase in the willingness of farmers to sell large pigs within the week, but the overall market supply proportion is limited. The sales of small and large weight pigs remained the same as last week; On the demand side, the cured sausage is in the final stage of the week, with a significant decrease in market demand and further decline in enterprise operating rates; During the week, there was no significant improvement in the demand for frozen products in the market. This week, we will focus on changes in the pace of group market sales, changes in pre holiday consumption, and adjustments to macro consumption policies.
Deep processing demand: In terms of neutral deep processing, the profit of corn starch processing has declined but still remains profitable. The operating rate of corn starch enterprises has increased month on month, and the consumption of corn has decreased month on month. Focus on the profit changes and start-up changes of deep processing enterprises in the future.
Alternative situation: In terms of a large number of alternative products, the price of wheat did not change much last week, with a price difference of 302 yuan/ton between jade and wheat. Wheat replacing corn no longer has a price advantage.
Weather situation: It is expected that in the next 10 days, from the 13th to the 15th, due to strong cold air, the temperature in most parts of the central and eastern regions will drop by 4-6 ℃, and some areas such as the northeast, eastern northwest, and central and western Inner Mongolia will cool by more than 8 ℃. In addition, there will be 4-6 level winds in the central and eastern parts of Inner Mongolia, northeastern regions, and northern North China, which is unfavorable for facility agriculture and animal husbandry production, grain storage and transportation, etc.
