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Daily Review on Grain Market in China--25/11/2019

Today (Nov. 25), the market for grains in China is shown as follows:

Corn:

Domestic corn price stays stable with individual declines today. The price prevails at 1,934-2,040 yuan/tonne among deep-processing enterprises in Shandong with some declines of 6-10 yuan/tonne compared with yesterday. At Jinzhou port, Liaoning, the purchasing price of new corn in 2019 (moisture 14.5% and test weight over 720 g/L) is 1,840-1,855 yuan/tonne unchanged with yesterday and the FOB is 1,890-1,905 yuan/tonne; while the purchasing price of corn (moisture below 15% and test weight 690-700 g/L) is 1,810-1,825 yuan/tonne unchanged from yesterday. At Bayuquan port, new corn in 2019 is traded at 1,815-1,820 yuan/tonne (test weight 700 g/L) unchanged with yesterday and 1,840-1,850 yuan/tonne (test weight 720 g/L) the same as yesterday. At Shekou port, Guangdong, the second-class corn price is raised to 2,000 yuan/tonne, but the corn is traded at 1,990 yuan/tonne up by 10 yuan/tonne from yesterday.

As the snow and rain in Northeast China is over, the sales volume in enterprises has increased obviously, and December is coming. And the date of Spring Festival advances, which shortens the sales cycle of corn in market, so farmers in Northeast area are reluctant to sell corn. In addition, the sales volume of corn in deep-processing enterprises in North China increases continuously. Thus, the market is still contained by loose phased supply, and corn prices of some enterprises decline by 10-16 yuan/tonne today. But due to the poor downstream demand for deep processing and slow recovery of breeding industry, traders are cautious in storing up, and enterprises are not active in purchasing and more take a hand-to-mouth buying strategy to keep safety inventory. Therefore, this cracks down the market. It is predicted that corn is still under pressure from a steady increase of sales volume in the late period.

Sorghum:

Domestic sorghum prices are stable with rises in some regions today, of which dried sorghum is priced at 2,400-2,500 yuan/tonne nationwide. (In Heilongjiang, dried sorghum up 40 yuan to 2,240 in Qiqihar and to 2,440 yuan in Heihe. In Inner Mongolia, raw sorghum up 40 yuan to 2,300 yuan/tonne and dried sorghum up 40 yuan to 2,440 yuan/tonne in Hinggan League and 2019 dried sorghum 2,440 yuan/tonne in Chifeng. In Jilin Province, dried sorghum up 20 yuan to 2,480 yuan/tonne in Songyuan, raw sorghum 2,340 yuan/tonne in Qian’an, and raw sorghum up 20 yuan to 2,320 yuan/tonne and dried sorghum up 60 yuan to 2,460 yuan/tonne in Taonan.) Prices for new sorghum keep firm at present, which can be contributed to its smaller planting acreage, as well as lower quality and production due to the frost coming earlier than usual. But the weak demand is also weighing down the prices. So short-term prices are likely to keep steady with narrow fluctuations. 

Imported sorghum prices keep steady with rises in some regions today, of which Australian sorghum is priced at 2,400-2,500 yuan/tonne at domestic ports. (Tianjin port: Australian raw sorghum 2,400 and dried sorghum 2,500 yuan/tonne. Guangdong port: US raw sorghum up 30 yuan to 2,130 yuan/tonne. Suqian: US sorghum 2,440 yuan/tonne.) In terms of prices, sorghum has lost a competitive advantage over corn. Besides, hog prices have begun to fall recently. The time for China and the United States to sign their phase one deal is expected to draw near, and the Chinese yuan has soared past 7, which will reduce the import cost. These factors are dragging down imported sorghum prices. However, it is still hard for US sorghum to go into Chinese market due to the trade frictions. Sorghum supply sees very small increases in China now, which is a support to the prices at ports. Short-term prices are predicted to keep steady with narrow fluctuations. Participants can pay attention to the outcome of trade negotiations. 

Barley:

Imported barley prices are mixed today, of which Australian raw barley is 2,120-2,130 yuan/tonne at domestic ports. (Nantong port: Canadian raw barley for feed down 10 yuan to 1,850-1,860 yuan/tonne, French barley 1,770-1,780, and Ukrainian raw barley 1,730-1,740; Guangdong port: Ukrainian barley up 10 yuan to 1,740 yuan/tonne.) In terms of prices, barley has lost a competitive advantage over corn. And the demand from hog breeding is also small due to the African swine fever, which is a curb on the spot market. Barley imports total 5 cargoes, or around 296,000 tonnes, for October shipment in South China. Growing port supply is now weighing down the market. But importers have a strong intention to prop up prices due to low stocks in hand and stubbornly high import cost from Australia. Short-term prices are predicted to keep steady with narrow fluctuations.

(USD $1=CNY 7.04)