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Daily Review on Grain Market in China

2018-10-19 www.cofeed.com
      Today ( Oct. 19th), the market for grains in China is shown as follows:

      Corn: Domestic corn prices extend gains partially today. The procurement price in Shandong further processing companies prevails at 1,850-1,970 yuan/tonne, some gaining 10-20 from yesterday. In Jinzhou port, Liaoning, 2017 dried corn is quoted higher by 10 yuan/tonne at 1,780 yuan/tonne (volume weight 700 g/L), and 2018 new corn remains steadily at 1,450-1,460 for 30% moisture and at 1,800-1,810 yuan/tonne for 15% moisture (volume weight over 700 g/L). In Bayuquan port, Liaoning, 2018 new corn is quoted steadily at 1,790-1,800 yuan/tonne, and old corn is stable at 1,740-1,750 yuan/tonne. In Shekou port, Guangdong, second-class old corn is quoted higher by 10 yuan/tonne at 1,920-1,930 yuan/tonne.

      Currently, bullish sentiment is still strong. On one hand, while farmers and traders tend to hoard their stock to support prices, China?Grain?Reserves?Corporation?has gradually started its procurement, which further shores up the market confidence. On the other, new corn still appears in small quantity, but processing companies hold a relatively low stock, so some in Shandong continues to raise their procurement price by 10-20 yuan/tonne to attract new corn marketing. Meanwhile, corn prices at both Southern and Northern ports keep going up. However, supply pressure still exists, for there may be unexpected intensive sales of new corn as it is the harvest time in Northeast, when the ex-warehouse of the old corn still continues. Moreover, hog farmers, worrying about worsening African swine fever, rush to sell out their pigs rather than replenish, which goes against corn feed consumption. Encouraged by the bullish mood, corn market will probably go strong steadily in the short run. Later focus shall be on weather in main planted areas and sale progress of corn on distributing market. If intensive sales of new corn appear, there will be callbacks for some time. 

      Sorghum: Imported sorghum price keeps stable today (US sorghum: raw sorghum is unchanged at 2,100, 2,130-2,150 and 2,060 yuan/tonnes in Nantong, Shanghai and Guangdong respectively. Australian sorghum: raw sorghum and dried sorghum remain unchanged at 2,220 and 2,330 yuan/tonne respectively in Tianjin and at 2,250 and 2,350 yuan/tonne separately in Qingdao, and raw sorghum is unchanged at 2,330-2,350 yuan/tonne in Shanghai. Domestic sorghum price also stays steady: raw sorghum at 1,700 and dried sorghum with freight at 1,800 in Hinggan League, Inner Mongolia, and respectively at 1,800 and 2,080 yuan/tonne (of higher quality) in Chifeng, Inner Mongolia, and respectively at 1,700 and 1,760 yuan/tonne in Qiqihar, Heilongjiang).

      Barley: Today, price for barley at port remains stable (Australian barley: unchanged at 2,060 yuan/tonne in Shandong and 2,080-2,090 in Nantong; French barley: unchanged at 1,970-1,980 and 1,880-1,890 in Nantong and Guangdong respectively; Ukrainian barley: unchanged at 1,870 in Guangdong).  

      Import cost of US sorghum at port remains at record highs since the trade war starts, which directly makes importers turn sway. Besides, Australian sorghum cost is also brought higher by the droughts. Under the circumstances, import volume shrinks gradually at ports, of which stock at Guangdong port has dwindled to a low level of 38,000 tonnes. Considering the difficulty to replenish low-cost stocks, importers tend to hoard their stocks to support prices. In addition, corn price at port continues to increase, which gives bullish support to the grain market. Merely, due to the outbreaks of ASF from time to time, hog breeding is severely crippled with farmers busy in damping rather than replenishing, so feed consumption is reducing. And such bearish mood is exerting pressure on grains at port, thus slowing down grain shipment. So prices for grains hold steady today under the coexistence of the bullish and the bearish. In general, grain market is predicted to see only little oscillation for the near term, and will probably stay stable.
 
(USD $1=CNY 6.94)