What to Do with The Corn in Storage?
Since the launch of the first auction of temporary storage corn on May 22, as of September 10, the Northeast temporary storage and transfer of corn planned to sell 71,376,999 tons of corn, the actual transaction of 24,096,991 tons, the total turnover rate of 31.5%. Although the temporary storage auction has been going on for 17 weeks, the transaction situation is not ideal, overall, in May The two auctions are more ideal, the first hot high transaction reached the highest record of 98.66% of the total transaction, and then only on May 29, when the total transaction rate of the auction was more than 50% (52.65%), from June to early September, the transaction situation of temporary storage corn has been in a lukewarm state, but the regional market situation is slightly differentiated.
Northeast temporary storage corn since the first auction, black, Jilin, Liao, Inner Mongolia four provinces and regions have maintained a weekly frequency of delivery, of which only Liaoning Province on August 20 suspended the auction week, in general, since the start of the sale of temporary storage corn, the state will be “price principle auction, focusing on Northeast, priority auction of old grain Under the guidance of this policy, the three provinces of Inner Mongolia, Jilin and Liaoning took the lead in completing the work of temporary storage corn in 2012, and began to release temporary storage grain sources in 2013 in August, compared with the auction progress of Heilongjiang Province is relatively lagging behind.
From the perspective of horizontal comparison, the transaction rate of temporary storage corn in Liaoning province ranked first (total transaction rate of 85.68%), Inner Mongolia ranked second (total transaction rate of 47.14%), Jilin Province followed (total transaction rate of 42.71%), and Heilongjiang ranked last (total transaction rate of 20.33%). Why is the northeast temporary storage corn, transaction differentiation is so obvious?
First of all, following the principle of “priority auction of old grain” in the auction of temporary storage, all provinces began to put in a small amount of corn from 2011 in May, and part of the surplus grain in 2008 was planned, and after the auction of corn in 2011, Northeast temporary storage corn began to enter the market in 2012. However, as far as the grain quality in Northeast China is concerned in 2011 and 2012, the grain quality in Liaoning, Jilin and Inner Mongolia is still acceptable, but the corn in Heilongjiang is mildewed due to the current degree of rain and snow weather and other factors, and there are more burnt grains after drying, so in terms of grain quality, it is reasonable to receive a cold reception from the market to a certain extent.
Secondly, in terms of the geographical location of the four provinces in Northeast China, Liaoning Province is the most advantageous geographical position. On the one hand, it is close to Shanhaiguan, which makes it convenient for corn to enter the customs, and on the other hand, it is close to Bayuquan, Jinzhou Port and other major corn distribution ports, with unique shipping conditions. The transportation situation in Jilin and the eastern region of Inner Mongolia is a little difficult, but the conditions are also more convenient through the short and medium distance automobile shipping port. Different from the above three provinces and regions, Heilongjiang is located in the Northeast inland, the transport is not smooth, and after entering the Northeast fresh fruits and vegetables listed in the local market by a certain crowd, freight prices have risen sharply, coupled with the quality of its own Heilongjiang storage corn is not dominant, so the auction resistance.
Compared with the northeast temporary storage corn transaction situation, the transfer storage corn transaction situation is more bleak. Since the first auction of corn in the warehouse on June 5, the corn in the warehouse has been involved in a wide range of regions, and Shandong, Hebei, Jiangxi, Hunan, Anhui, Guangdong, Hubei, Jiangsu, Guizhou and other provinces have participated in the auction, of which Shandong and Hebei provinces have auctioned only 39,887 tons of corn in the warehouse, and all of them have been sold under the circumstances of grain shortage in the Guan region. In addition, the provinces of corn auction are relatively chaotic and lack stability, so the author chooses Jiangxi and Hunan as two relatively continuous provinces for analysis. Overall, the transaction of corn in Hunan and Jiangxi provinces were not satisfactory, with the highest transaction rate of 69.50%(Hunan transaction rate on June 12) and the lowest transaction rate of 0%(Hunan transaction rate in the first two weeks of September), compared with the highest and lowest transaction rates of 30.05%(August 27) and 1.09%(July 23) in Jiangxi Province. The reasons why the transfer of corn is bleak:
First of all, the southern regional market supply balance. As far as the market of the southern sales area is concerned, on the one hand, affected by the early freight subsidy policy, a large number of subsidized corn purchased in the Northeast before June 30 arrived, which supplied the market to a certain extent; On the other hand, due to the downturn in the downstream aquaculture industry, feed consumption has not changed significantly, coupled with the beginning of July, by the northeast, North China’s two main producing areas of corn prices skyrocketing, corn prices continued to rise, so wheat, imported sorghum, barley and other substitution ratio increased significantly, individual regions in the wheat replacement ratio of more than 50%, and in most feed enterprises to retain In the case of 1-2 months of safety inventory, it is difficult to arouse market interest even if the corn is moved to auction.
Secondly, the quality deviation of corn transferred to storage is limited in feeding. According to the reaction of market participants, the overall quality of the southern storage corn deviation, because the auction of storage corn are 12 years of Northeast temporary storage acquisition grain, coupled with long-distance transportation, the proportion of damaged grains, mildew grains, burnt grains are more than normal indicators, so even feed enterprises Industry participation in the auction of storage corn, but the use is limited, generally can only be used as poultry, and the price advantage of storage corn is not obvious, so it is normal for enterprises to participate in the auction is low.
Third, the warehouse corn starting price is high, imported low-cost corn to seize the market. Taking third-grade grain as an example, the starting price of corn in Hunan and Jiangxi provinces is 2400 yuan/ton, and the grade price difference is 40 yuan/ton. According to this rough calculation, plus certain warehousing fees, premium and short-distance transportation costs, corn is transferred to the factory The cost is at least 2,500 yuan/ton or more, while the price of imported sorghum, barley and other substitutes is 2,300 yuan/ton, so in the low-end feed, there is no price advantage for corn. In addition, since July 3, Jiangxi, Hunan and other provinces have put in 2011 and 2012 in the United States imported No. 2 yellow corn, imported corn starting auction price is only 2150 yuan/ton, compared with the transfer of storage corn price advantage is obvious, so the transaction is extremely hot, the transfer of storage corn market formed a certain squeeze.
Since July 3, the three provinces of Jiangxi, Hunan and Guangdong have released 500,000 tons of imported corn for the first time, and imported corn has become a highlight of the temporary storage. After that Hainan, Zhejiang, Fujian, Guangxi, Liaoning, Jiangsu, Shanghai, Hubei, Anhui, Sichuan, Hebei, Shandong, Chongqing, Guizhou, North Beijing, Yunnan and other provinces and cities have also joined the ranks of imported corn auction, and the low transaction situation of corn storage formed a strong contrast, the import corn transaction rate showed a straight rise in general, which from July 31 to September 4, the import corn transaction rate is maintained at a high level of more than 95%.
In the case of the gradual cooling of the northeast temporary storage corn transaction and the bleak low transaction of the storage corn, what is the reason for the hot transaction of imported corn can not help but ask people. But when you look at all the factors in the market, the problem is solved.
First, the price advantage of imported corn is very obvious, the starting price of imported corn is 2150 yuan/ton, although the quality deviation of imported corn stored in Guangdong and other places in 2011, generally can only be used as poultry and duck materials, but in the case of high domestic corn prices, and imported sorghum and other substitutes are difficult to find, purchase Importing corn at the bottom price is also a good way for feed companies to reduce costs;
Second, since 2014, the overall downturn in the domestic breeding industry, although since the Dragon Boat Festival, the domestic pig prices began to pick up, but due to the farmers to compensate the fence is not positive and other factors, feed consumption is not a significant sign of improvement, and domestic corn prices skyrocketing, in order to reduce the production cost, low-cost imported corn has become the object of feed enterprises sought after;
Third, according to the “National temporary storage grain (imported corn) bidding sales transaction rules”, which stipulates that the seller of imported corn must be a domestic imported grain processing enterprise recognized by the national quality inspection department, and at the same time, the auction of grain sources can only be used as raw materials required for production and processing, and the actual purchase amount It shall not exceed the processing capacity of the enterprise itself, shall not be transferred for resale, and shall not flow into the ration market. In fact, this means that the main flow of imported corn is limited to feed enterprises with imported grain processing qualifications.
According to the national temporary storage auction plan, the 2014 temporary storage corn work will continue until October before the Northeast new corn listing, coupled with the current national temporary storage inventory pressure is still high, at the same time facing the new annual Northeast three provinces and one region temporary storage corn acquisition task, so before the new grain listing of temporary storage corn will undoubtedly continue to “focus on the Northeast” the main idea. At the same time, China Grain Storage plans to vacate 30 million tons of storage capacity for temporary storage in the Northeast region by the end of November through cross-provincial transfer, variety exchange, and new storage capacity.
According to market participants, in 2014, the Northeast temporary storage corn transfer task of 10 million tons, as of August On the 25th, China Grain Storage Heilongjiang, Jilin and Inner Mongolia completed the first batch of interprovincial transfer of corn storage in 2014 ahead of schedule, with the transfer volume of 800,000 tons, 800,000 tons and 400,000 tons respectively, of which the second batch of inter-provincial transfer plan of Heilongjiang Branch has shipped 60.4%. It is the middle of September, and how will the auction of temporary corn be run in the next month or two?
First of all, in the coming period of time, the pattern of temporary storage auctions focusing on the Northeast will not change, but the transaction will remain at a low level. Affected by the summer corn harvest in North China and other places, corn prices in Huanghuai and other places in North China have a seasonal decline, and most grain enterprises in North China have now locked their eyes on the local new corn On the other hand, even if the drought in Henan and other places was more serious in the early stage, the production reduction did not exceed the previous market expectation of 10% level, so in mid-September, with the large number of summer corn listed in the Huanghuai region of North China, the market focus will also shift to new corn.
Secondly, in Heilongjiang, Jilin, Inner Mongolia three provinces with an annual capacity of more than 100,000 tons of enterprises in May to October to purchase Northeast temporary storage corn can enjoy 100 yuan/ton of targeted subsidy policy stimulated, these deep processing enterprises will still be the main digestion of local temporary storage corn. However, it should be noted that with the recent rise in freight in Northeast China and the decline in corn prices in North China, the current operation of temporary storage corn trade profits continue to decline, and some areas even have negative surplus, so in this case, the enthusiasm of traders to participate in the sale of eastern Abi temporary storage corn will continue to cool down.
Finally, there are still a lot of stocks of corn that have not been auctioned, and there are certain variables whether the auction pattern of corn in temporary storage will be adjusted. As of the week of September 4, the imported corn in storage has all been auctioned off, but as far as the storage corn is concerned, as of the week of September 10, the cumulative transaction was only 1.203,500 tons, and there are 8,066,500 tons of surplus inventory of 2012 storage corn, before the new season corn is supplied to the market in large quantities, whether the national storage will make relevant policy adjustments still needs to be paid close attention.
This article is shared by Scikoon Industry Co., Ltd.
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