Corn: Climbing up the stairs

Core viewpoint: Neutral biased. The Ukrainian Ministry of Agriculture stated that as of February 12, the grain export volume of Ukraine in 2024/25 (starting from July) was 27 million tons, an increase of 1.47 million tons or 5.8% compared to the same period last year's 2552.3. The export volume of corn is 13.114 million tons. Last week, the temperature anomaly in the main corn producing areas of Brazil did not change much compared to previous years, with less precipitation in the central and eastern regions and less precipitation in the central and southern regions; NOAA predicts that temperatures in Brazil's corn producing states will remain high in the next 6-10 days, with less precipitation in Rio Grande do Sul and little change in precipitation in the central southern corn producing states of Mato Grosso and Parana. The progress of planting a crop of corn in Brazil is 96.8%, slightly slower than last year, and the harvest progress is 13.3%, slightly slower than last year. The sowing progress of the second crop of corn is 18.8%, slower than last year.

Last week, corn prices were strong. As of February 14th, the weekly average price of corn in China was 2151 yuan/ton, an increase of 21 yuan/ton compared to the previous month. Looking at different regions, the price of corn in Northeast China has risen significantly, while the intention of grassroots grain sales is still average. The enthusiasm of traders for inventory has slightly increased, and the continuous increase in purchase prices for deep processing has stimulated the arrival of goods. Corn prices in North China continue to operate strongly. The purchase volume of grassroots grain points is average, and the willingness of traders to ship has weakened. The arrival volume of goods in front of deep processing enterprises remains low, and enterprises continue to raise prices to promote revenue. The corn prices in the sales area market are running strongly, driven by the high cost of goods and strong market conditions. Port quotations have been rising for consecutive days, but spot transactions are average. Downstream enterprises are bullish on the future market and tend to sign forward contracts.

Last week, the overall price of pigs did not change much. On the supply side, the pace of slaughter in the breeding side resumed within the week, and during the holiday period, pigs with increased weight were gradually put on the market. The proportion of small weight pigs slaughtered remained stable; On the demand side, after the Spring Festival holiday, some enterprises resumed production, but after the holiday, the market demand was biased, and the delivery of white stripe orders was not smooth. In the first half of the week, the willingness of enterprises to start work gradually declined. In the second half of the week, supported by the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival) and the beginning of school, the demand for fresh sales and segmentation of slaughtering enterprises increased, and the operating rate stopped falling and rising. This week, we will focus on the admission situation of secondary education, changes in demand after the school starts, and the scale of market sales. In terms of deep processing, the profit of corn starch processing has increased. The operating rate of corn starch enterprises has increased month on month, and the consumption of corn has also increased month on month. Focus on the profit changes and start-up changes of deep processing enterprises in the future.

Overall, last week's corn main contract showed a high-level consolidation trend. On the one hand, just after the Spring Festival, there has not been a large-scale launch of corn purchase and sales, and the supply pressure has been greatly relieved; On the other hand, with frequent warm winds from the policy side, China Grain Reserves Corporation has further expanded its purchasing points for new corn, further boosting market confidence; Finally, deep processing enterprises raised prices to promote revenue, and traders gradually began to build warehouses to collect grain. Next week, we need to focus on the weather conditions in the production areas, pay attention to changes in the purchase prices of deep processing enterprises, and monitor the progress of grassroots grain sales in the future.

Origin situation: According to the Ukrainian Ministry of Agriculture, as of February 12, the grain export volume of Ukraine in 2024/25 (starting from July) was 27 million tons, an increase of 1.47 million tons or 5.8% compared to the same period last year's 2552.3. The export volume of corn is 13.114 million tons. Last week, the temperature anomaly in the main corn producing areas of Brazil did not change much compared to previous years, with less precipitation in the central and eastern regions and less precipitation in the central and southern regions; NOAA predicts that temperatures in Brazil's corn producing states will remain high in the next 6-10 days, with less precipitation in Rio Grande do Sul and little change in precipitation in the central southern corn producing states of Mato Grosso and Parana. The progress of planting a crop of corn in Brazil is 96.8%, slightly slower than last year, and the harvest progress is 13.3%, slightly slower than last year. The sowing progress of the second crop of corn is 18.8%, slower than last year.

Domestic supply: Excessive. Last week, corn prices were strong. As of February 14th, the weekly average price of corn in China was 2151 yuan/ton, an increase of 21 yuan/ton compared to the previous month. Looking at different regions, the price of corn in Northeast China has risen significantly, while the intention of grassroots grain sales is still average. The enthusiasm of traders for inventory has slightly increased, and the continuous increase in purchase prices for deep processing has stimulated the arrival of goods. Corn prices in North China continue to operate strongly. The purchase volume of grassroots grain points is average, and the willingness of traders to ship has weakened. The arrival volume of goods in front of deep processing enterprises remains low, and enterprises continue to raise prices to promote revenue. The corn prices in the sales area market are running strongly, driven by the high cost of goods and strong market conditions. Port quotations have been rising for consecutive days, but spot transactions are average. Downstream enterprises are bullish on the future market and tend to sign forward contracts.

Feed demand: Neutral. The overall price of pigs did not change much last week. On the supply side, the pace of slaughter in the breeding side resumed within the week, and during the holiday period, pigs with increased weight were gradually put on the market. The proportion of small weight pigs slaughtered remained stable; On the demand side, after the Spring Festival holiday, some enterprises resumed production, but after the holiday, the market demand was biased, and the delivery of white stripe orders was not smooth. In the first half of the week, the willingness of enterprises to start work gradually declined. In the second half of the week, supported by the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival) and the beginning of school, the demand for fresh sales and segmentation of slaughtering enterprises increased, and the operating rate stopped falling and rising. This week, we will focus on the admission situation of secondary education, changes in demand after the school starts, and the scale of market sales.

Deep processing demand: In terms of neutral deep processing, the profit of corn starch processing has increased. The operating rate of corn starch enterprises has increased month on month, and the consumption of corn has also increased 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 220 yuan/ton between jade and wheat. Wheat replacing corn no longer has a price advantage.

Weather situation: Neutral. It is expected that in the next 10 days, temperatures in most parts of the country will be close to normal, with frequent but weak cold air activity, and temperatures in northern regions will fluctuate. It is necessary to closely monitor the impact of temperature changes in production areas on the moisture content of corn.

Foreign origin situation

USDA: US Corn Supply and Demand Report for February

On February 13th, the USDA released its February supply-demand balance report, with an expected corn planting area of 90.6 million acres for the 2024/2025 fiscal year in the United States, unchanged from the previous month; The expected corn yield for the 2024/2025 fiscal year in the United States in February is 179.3 bushels per acre, compared to 179.3 bushels per acre in January, unchanged from the previous month; The expected corn production for the 2024/2025 fiscal year in the United States in February is 14.867 billion bushels, while in January it is expected to be 14.867 billion bushels, unchanged from the previous month.

The report is generally positive. The report did not lower its exports due to a decrease in exports to China, but instead increased its new export forecast by 4 million tons, indicating that the United States can still rely on its export advantage to export a considerable amount of corn to countries other than China, which is beneficial for its domestic price stability. In addition, the decrease in total supply has led to a reduction in ending inventory, which has to some extent alleviated the situation of oversupply.

United States: Corn Export Situation

On the week of February 14th, the net sales of corn exports from the United States for 2024/2025 were 1.649 million tons, an increase of 172000 tons compared to the previous week's 1.477 million tons; The total export volume of US corn is 23.639 million tons, with an outstanding sales volume of 22.777 million tons.

US: Situation of US corn exports to China

During the week of February 14th, the United States shipped 1.354 million tons of 2024/2025 corn exports, compared to 1.352 million tons the previous week; The United States shipped 0 million tons of corn to China (mainland region), and 6000 tons to China last week, a month on month decrease of 6000 tons, with a cumulative sales volume of 32000 tons to China.

US: Net increase in US corn fund

As of the week ending February 14th, the long position of US corn was 447800 lots, an increase of 700 lots compared to the previous week; Short positions of 83600 lots decreased by 12800 lots compared to last week.

As of the week ending February 14th, the net long position was 361500 lots, an increase of 17800 lots compared to the previous week, indicating an increased willingness to go long. The lowest price of the CBOT corn main contract this week is 481.50 cents per bushel, and the highest price is 499.75 cents per bushel.

USDA: Brazilian Corn Supply and Demand Report for February

In February, according to the latest estimate from the USDA, the corn production for 2024/25 was 126 million tons, with an estimated export of 46 million tons, a decrease of 1 million tons compared to the previous month. But the year-on-year growth is still significant.

Overall, the latest USDA report believes that the current hot and rainy weather in the price range is not enough to reduce production of new products, and may even increase production by 4 million tons compared to last year, indicating that Brazil's new product production still maintains a growth trend. Although exports have been reduced by 1 million tons, they still remain at a high level of 46 million tons, indicating that Brazil will continue to maintain high export expectations based on cost advantages, and production will remain at a high level. The overall supply conditions for new products are still relatively loose.

Brazil: Central corn producing region expected to experience high temperatures and little rain next week

During the week of February 14th, the temperature anomaly in the main corn producing areas of Brazil remained relatively stable compared to previous years, with less precipitation in the central and eastern regions and less precipitation in the central and southern regions; NOAA predicts that temperatures in Brazil's corn producing states will remain high in the next 6-10 days, with less precipitation in Rio Grande do Sul and little change in precipitation in the central southern corn producing states of Mato Grosso and Parana.

Brazil: Slow sowing of second crop corn

As of the week of February 14th, the progress of planting corn for the 2024-2025 crop year was 96.8%, slightly slower than last year, and the harvest progress was 13.3%, slightly slower than last year. The sowing progress of the second crop of corn is 18.8%, slower than last year.

According to the national average level weighted by the total sowing area of states such as GO, PI, TO, SP, MG, MA, MS, MT, and PR, the growth and development stage of the new crop of corn accounts for 18.2%, the germination stage accounts for 2.7%, the flowering stage accounts for 10.2%, the filling stage accounts for 30.0%, and the mature stage accounts for 25.4%. The growth and development stage of second crop corn accounts for 27.5%, and the germination stage accounts for 68.8%.

Brazil: Weekly corn exports increase month on month

According to Anec Brazil's latest estimate, Brazil's corn exports from February 9th to February 15th amounted to 410800 tons, compared to 335000 tons last week, an increase of 75800 tons compared to the previous week.

As of February 14th, according to Anec Brazil's latest estimate, Brazil's corn exports are expected to reach 1.3022 million tons in February, compared to 724000 tons in the same month last year, an increase of 578100 tons year-on-year.

As of this week, Brazil's cumulative corn exports for January 2025 were 3.1463 million tons, a decrease of 361200 tons or 10.29% compared to the export of 3.5075 million tons in January of last year.

Import cost: There is a slight advantage in importing corn from the West of the United States

As of February 14th, the arrival cost of Brazilian corn imported within China's quota in July for the second half of the year is around 2166 yuan/ton, while the arrival cost of Meiwan corn in February is around 2253 yuan/ton; The arrival cost of the February shipment of corn from the western United States is around 2224 yuan/ton; The transaction price of bulk grain at Shekou Port is 2290 yuan/ton, with a slight advantage in importing corn from the western United States.

Domestic supply and demand situation

Weather: Pay attention to cooling and snowfall weather

As of the week of February 14th, the temperatures in northern and southern Xinjiang, central and northeastern parts of northwest China, western part of North China, northwestern part of South China, and eastern part of southwestern China were 1-4 ℃ lower than the same period in previous years, while the temperatures in most other parts of the country were close to or slightly higher than usual. In eastern Inner Mongolia, most parts of Northeast China, and northern Xinjiang, there is snow accumulation of more than 5 centimeters. Among them, the snow depth in northern Heilongjiang, southeastern Jilin, and Hulunbuir, Inner Mongolia ranges from 20 to 50 centimeters. The severe cold weather has led to an increase in heating costs for facilities such as greenhouses and livestock pens.

It is expected that in the next 10 days, temperatures in most parts of the country will be close to normal, with frequent but weak cold air activity, and temperatures in northern regions will fluctuate. It is necessary to closely monitor the impact of temperature changes in production areas on the moisture content of corn.

Port inventory: North Port inventory has decreased month on month

As of the week of February 14th, the total corn inventory in the four northern ports was 4.226 million tons, a decrease of 174000 tons compared to the previous week.

Last week, the price of corn at the port increased. The atmosphere of grassroots festivals is still strong, and there is a large diversion of national storage and deep processing enterprises. The port arrival volume is not high, but over time, the port arrival volume gradually increases. Affected by increased storage and farmers' reluctance to sell during the week, the market has a strong bullish sentiment, and the continuous rise in production prices has pushed up the cost of port collection.

Port inventory: Guangdong Port corn inventory increased month on month

As of the week of February 14th, the total inventory of corn in Guangdong Port's domestic and foreign trade was 1.508 million tons, an increase of 98000 tons from the previous week's 1.41 million tons. Among them, the domestic corn inventory in Guangdong Port totaled 1.502 million tons, an increase of 95000 tons from last week; Foreign trade inventory is 6000 tons, unchanged from last week.

Feed demand: Narrow range changes in breeding profits

As of the week of February 14th, the average price of live pigs sold nationwide was 14.43 yuan/kg, a decrease of 1.21 yuan/kg from last week, a month on month decrease of 7.74%, and a year-on-year decrease of 3.22%. In terms of breeding profits, the profit from self breeding and self raising is 22.12 yuan/head, while the profit from purchasing piglets is -4.24 yuan/head, with narrow fluctuations in breeding profits.

Last week, the overall price of pigs did not change much. On the supply side, the pace of slaughter in the breeding side resumed within the week, and during the holiday period, pigs with increased weight were gradually put on the market. The proportion of small weight pigs slaughtered remained stable; On the demand side, after the Spring Festival holiday, some enterprises resumed production, but after the holiday, the market demand was biased, and the delivery of white stripe orders was not smooth. In the first half of the week, the willingness of enterprises to start work gradually declined. In the second half of the week, supported by the Yuanxiao (Filled round balls made of glutinous rice-flour for Lantern Festival) and the beginning of school, the demand for fresh sales and segmentation of slaughtering enterprises increased, and the operating rate stopped falling and rising. This week, we will focus on the admission situation of secondary education, changes in demand after the school starts, and the scale of market sales.

Feed demand: Profit situation of poultry farming

As of the week ending February 14th, the weekly breeding profit for free range chickens was -3.53 yuan per chicken, up from -1.85 yuan per chicken before the holiday. The weekly breeding profit of laying hens was 2.67 yuan/egg, a decrease of 0.63 yuan/egg from last week.

Last week, broiler farming continued to incur losses. The average theoretical breeding loss for free range chickens is 2.81 yuan per chicken, with a significant range of losses; If the chicken source is infected, it will completely lose its bargaining power, and individual investors may even suffer losses of more than 4.00 yuan per chicken. If it is a contracted chicken source, the losses will be relatively smaller. In terms of laying hens, egg prices are stable in the south and strong in the north. Currently, they are in the post holiday inventory consumption period, and overall demand is weak. Many regions are holding steady and waiting to see. However, the opening prices in the north are relatively low, which stimulates supermarkets, food factories, and traders to buy from the bottom and push the north to make up for the low prices. Due to lower than expected opening prices last week, the weekly average price of eggs decreased significantly compared to the previous week, resulting in a significant decline in profits for egg laying chicken farming.

Feed enterprise inventory: inventory days decrease month on month

As of the week ending February 14th, the average corn inventory of sample feed companies was 30.11 days, a decrease of 0.38 days compared to the previous week, a decrease of 1.25% compared to the previous week, and a year-on-year decrease of 2.90%.

Industrial demand: Profit situation of corn starch processing enterprises

As of the week ending February 14th, the profit from deep processing of corn starch in Jilin was 98 yuan/ton, up 97 yuan/ton from last week, while the profit from deep processing of corn starch in Shandong was 48 yuan/ton, up 8 yuan/ton from last week; The profit from deep processing of corn starch in Heilongjiang is 90 yuan/ton, an increase of 94 yuan/ton from last week. The profit from deep processing of corn starch in Hebei was 122 yuan/ton, an increase of 30 yuan/ton compared to the previous period.

Overall, with the progress of grain sales, the supply of corn has temporarily decreased, corn prices have stopped falling and rebounded, and the rise in cost side prices has suppressed processing profits.

Industrial demand: The operating rate of deep processing enterprises has increased month on month

As of the week of February 14th, the starch start-up rate of the enterprise was 57.36%, an increase of 4.06% compared to last week.

Industrial demand: Consumption of deep processing enterprises increases month on month

As of the week ending February 14th, 126 major corn deep processing enterprises in China have consumed a total of 1.1865 million tons of corn, an increase of 52600 tons compared to the previous week. Among them, corn starch processing enterprises consumed 607000 tons of corn, an increase of 30300 tons compared to last week; Amino acid enterprises consumed 209700 tons, unchanged from last week; Alcohol companies consumed 369800 tons, an increase of 22300 tons compared to last week.

Industrial demand: Corn inventory of deep processing enterprises decreases month on month

As of the week of February 14th, the corn inventory of 96 deep processing enterprises was 4.456 million tons, a decrease of 7.80% compared to last week.

Last week, the corn inventory of deep processing enterprises across the country continued to decline. After the Spring Festival, the pace of farmers' grain sales has recovered slowly, and the purchase volume of grassroots grain points has remained low. Due to the continuous rise in prices and weak willingness of traders to ship, deep processing enterprises mainly consume inventory.

Data source: My Steel, Zijin Tianfeng Futures Research Institute

Industrial demand: Downstream deep processing morning to vehicle volume decreases month on month

As of the week of February 14th, the cumulative number of vehicles processed by Shandong's deep processing industry was 1671, a decrease of 752 vehicles or 31.03% compared to the previous week's 2423 vehicles.

Last week, the number of vehicles in front of deep processing doors decreased compared to the previous week, due to the lack of large-scale purchasing and sales activities after the new year, and with the rise in spot prices, farmers' reluctance to sell has intensified, resulting in a significant decrease in the number of vehicles arriving. Focus on the profit changes and acquisition prices of deep processing enterprises in the future.

Data source: Zijin Tianfeng Futures Research Institute

Starch demand: price situation of corn starch and by-products

As of the week of February 14th, the price of corn starch was 2797 yuan/ton, with a month on month increase of 30 yuan; The price of corn germ meal is 1370 yuan/ton, with a month on month increase of 160 yuan; The price of corn protein powder is 4200 yuan/ton, with a month on month increase of 240 yuan; The price of corn bran is 800 yuan/ton, with a month on month increase of 80 yuan.

The price of corn by-products has increased significantly. At the beginning of this week, soybean meal still had a significant impact. With the widening gap in single protein, the cost-effectiveness advantage of protein powder began to emerge, and enterprise quotations continued to rise; Fiber is mainly affected by the increase in monthly export volume and the rise in corn prices, resulting in a relatively strong trend in prices.

Starch demand: downstream operating rate of corn starch

As of the week of February 14th, the operating rate of F55 fruit glucose syrup was 26.24%, an increase of 15.05 percentage points compared to last week. Overall, the production of fruit glucose syrup has been gradually resumed during the Spring Festival period by enterprises that stopped production; The operating rate of malt syrup was 21.29%, an increase of 12.39 percentage points compared to last week. Enterprises have gradually resumed operating, and the overall operating rate has increased; The operating rate of corrugated paper was 51.9%, an increase of 31.13% compared to last week; The operating rate of cardboard was 54.19%, an increase of 26.49% compared to last week.

Basis situation: corn spot price and basis trend

As of February 14th, the average spot price of corn was reported at 2176 yuan/ton, and the basis price of corn was reported at -112 yuan/ton.

In terms of basis, the corn basis fluctuated upward last week. The spot price of corn has increased significantly; On the market side, the main corn contract remains volatile; Therefore, the basis fluctuates upwards. It is expected that the market will continue to maintain a high volatility trend in the future, and the basis may continue to fluctuate weakly.

Price difference situation: Corn price difference situation

As of the week of February 14th, the price difference structure of corn futures is 2503 at a discount of 2505, 2505 at a discount of 2509.

Due to the fact that March is still in the stage of concentrated release of sales pressure after the New Year, the supply is still relatively concentrated. In addition, the temperature is gradually rising, and there is a risk of mold in the grain source. Therefore, the grain output is relatively concentrated, and the price is under pressure. Therefore, 2503 is discounted by 2505; September is a period when traditional corn is not in season, with less supply and demand pressure, and demand is at a critical point of improvement. Therefore, the price performance is relatively strong compared to May, so 2505 is discounted by 2509. It is expected that the monthly difference in the near future will approach the previous high level or continue to encounter obstacles and decline.

Alternative situation: The price difference between jade and wheat has slightly narrowed

As of February 14th, the average market price of wheat was 2396 yuan/ton, and the average market price of corn was 2176 yuan/ton. The price difference between wheat and corn was 220 yuan/ton, a decrease of 38 yuan/ton from last week. The price difference between wheat and corn was greater than 200 yuan/ton, indicating that replacing corn with wheat had little advantage.

Last week, wheat prices fell behind and rose, and the market was cautious in purchasing and selling. After the Spring Festival, the market supply and demand game intensified, and some flour enterprises with low inventory had to replenish their stocks to support prices. On the other hand, the release of national reserve grain and the replenishment of imported wheat increased market supply, putting pressure on wheat prices to decline. Wheat prices fluctuate and adjust under the game of supply and demand.

Customs data shows that China's wheat imports in December were only 140000 tons, a year-on-year decrease of about 74.5%. The total import volume of wheat from January to December 2024 is estimated to be 11.01 million tons, a year-on-year decrease of about 8%.

Data source: Zijin Tianfeng Futures Research Institute

Balance sheet: New production expected to decrease, import volume to decrease year-on-year

As of February 14th, the corn balance sheet has not been significantly adjusted compared to the previous month, and the expected decrease in new production is still maintained, with a decrease of about 7.6 million tons. In addition, with the tightening of import corn policies, it is estimated that the import volume of new season corn will be reduced by 3 million tons. The overall supply and demand remain in a tight balance state, and the ending inventory has significantly decreased compared to last year, but still maintains a loose expectation