Today (Jun. 6th), the market for grains in China is shown as follows:
Corn: Domestic corn prices stay stable with some declines today. The price prevails at 1,994-2,070 yuan/tonne in Shandong today, with some declines of 4 yuan/tonne. At Jinzhou port, Liaoning, corn with 14.5% moisture, volume weight over 700 g/L, mildew within 2%, 1% heat damage and 6%-8% unsound grain is priced steadily at 1,900-1,920 yuan/tonne. At Bayuquan port, 2018 new corn is unchanged at 1,870-1,895 yuan/tonne (volume weight 690 g/L and moisture 14.5%). At Shekou port, Guangdong, second-class corn is offered at 2,000 yuan and traded at around 1,980-1,990 yuan/tonne.
The upbeat market sentiment is weighed down by falling prices from high levels in northern markets and at ports. And the third round auction of temporary-reserved corn has kicked off today, only to see declining trading rate and further shrinking premiums. Besides, outbreaks of the African swine fever continue to occur, especially in southern provinces, and pig amount in breeding is thus reducing. Feed enterprises show little enthusiasm purchases, resulting in weak deliveries in market. And traders with stockpiles at port also turn wavering and inclined to reduce their stockpiles. As a result, corn is traded lower further by 6-20 yuan/tonne in production areas and at ports, and may continue to drop in coming few days. However, delivery cost in the auction still remains at a high level. And U.S. grains can hardly find a channel to enter China amid huge uncertainty in trade talks. Under such supply tensions and high cost, corn will probably have limited space for downside. Participants can pay attention to the auction and the market demand.
Sorghum:
Imported sorghum prices are flat today. (U.S. raw sorghum is priced steadily at 2,160 yuan/tonne in Shanghai, 2,160 in Nantong and not offered for out of stock in Zhangjiagang and Guangdong; Australian sorghum: raw sorghum is 2,220 yuan/tonne in Tianjin, 2,200 in Qingdao and 2,320 yuan/tonne in Nantong, and dried sorghum is 2,320 yuan/tonne in Tianjin and remains unchanged at 2,300 in Qingdao).
Domestic sorghum prices keep steady today. In Inner Mongolia, raw sorghum is 2,140 and dried sorghum 2,200 yuan/tonne in Hinggan League; raw sorghum is not offered and dried sorghum 2,300 yuan/tonne in Chifeng; and raw sorghum is not offered in Tongliao. In Jilin Province, dried sorghum is 2,300 yuan/tonne in Changchun; raw sorghum sacks and dried sorghum with loading are both 2,100 yuan/tonne in Songyuan, sorghum is out of stock in Baicheng; and raw sorghum and dried sorghum sacks are 1,900 and 1,980 yuan/tonne in Taonan. In Heilongjiang Province, dried sorghum with loading is 2,060 yuan/tonne in Qiqihar; dried sorghum with loading is 2,200 yuan/tonne in Daqing, and raw sorghum is 1,900 yuan/tonne and dried sorghum is 2,040 in Heihe. In Shanxi Province, raw sorghum is 2,100 yuan/tonne in Yuncheng, bulk dried sorghum with freight is 2,360 yuan/tonne in Jinzhong, and raw sorghum with freight and dried sorghum with freight are 1,960 and 2,160 yuan/tonne in Xinzhou.
Barley: Barley prices stay stable today. (Australian barley: raw sorghum is 2,220 yuan/tonne in Qingdao and bulk raw sorghum is 2,210 in Nantong; Canadian barley: raw barley is 2,080 yuan/tonne and for brewing is 2,180 yuan/tonne in Nantong, and raw sorghum is 2,080 yuan/tonne in Qingdao; French barley: raw barley is not offered in Nantong; Ukrainian barley: not offered in Guangdong).
Sorghum price is now dragged down by weak demand due to continued drops in corn prices. And importers with storage in hand tend to prop up prices in view of low barley inventories at ports and stubbornly high cost of Australian barley. Merely, port sorghum and barley have lost their price advantage against corn as its energy feed substitutes. According to Cofeed, by the end of April, 500 enterprises surveyed has a total of 13,736,781 pigs in breeding, a reduction of 112,890 by 0.82% from 13,849,671 month on month. And for the 464 enterprises surveyed, sow number totals 1,292,659 in late April, down 6,864 by 1.29% from 1,309,523 month on month. The African swine fever has roiled the original trend of hog cycle in China, as middle and small farmers withdrew from the market and geared up the elimination of breeding sow stocks since the first outbreak last August, and it has been fiercely cutting the pig number in those provinces reported with more outbreaks. Thus, it will be hard for farmers to rebuild confidence in short time as a fall in live pig and sow stocks has stricken a serious blow at the sector. Given this, grain market will be curbed by its later consumption. In addition, China has bought 65,000 tonnes of US sorghum, the first purchase since August last year. Generally, port sorghum and barley markets are predicted to keep steady with some fluctuations in the short term, and port sorghum market may be buoyed again by concerns over trade disputes, so participants and focus on the outcome of trade talks.
(USD $1=CNY 6.91)
