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Daily Review on Grain Market in China--26/11/2019

Today (Nov. 26), the market for grains in China is shown as follows:

Corn:

Domestic corn price stays stable with slight fluctuations today. The price prevails at 1,918-2,030 yuan/tonne among deep-processing enterprises in Shandong with individual declines of 4-10 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 price is 1,890-1,905 yuan/tonne; while the purchasing price of corn (moisture below 15% and test weight 690-700 g/L) is 1,820-1,825 yuan/tonne unchanged from yesterday. At Bayuquan port, new corn in 2019 is traded at 1,825-1,830 yuan/tonne (test weight 685-700 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 up by 10 yuan/tonne from yesterday.

As December is coming, the sales cycle of corn in market has shortened. And farmers intend to sell corn to for cash before Spring Festival, so Northeastern farmers increase willingness to sell the corn. But due to the poor downstream demand for deep processing and slow recovery of breeding industry, traders are cautious in storing up corn, and enterprises are not active in purchasing and more take a hand-to-mouth buying strategy to keep safety inventory. Thus, the corn market is still under fundamental pressure. Nevertheless, there is an additional decrease in corn arrivals of enterprises in North China after falling continuously in prices, and the tight supply at Southern ports also brings support. In a hybrid of the bull and the bear, domestic corn prices fluctuate slightly at 4-10 yuan/tonne and still fluctuate to adjust recently. Buyers can keep eyes on the pace of marketing.

Sorghum:

Domestic sorghum prices are stable today, of which dried sorghum is priced at 2,400-2,500 yuan/tonne nationwide. (In Heilongjiang, dried sorghum 2,240 in Qiqihar and 2,440 yuan in Heihe. In Inner Mongolia, raw sorghum 2,300 yuan/tonne and dried sorghum 2,440 yuan/tonne in Hinggan League and 2019 dried sorghum 2,440 yuan/tonne in Chifeng. In Jilin Province, dried sorghum 2,480 yuan/tonne in Songyuan, raw sorghum 2,340 yuan/tonne in Qian’an, and raw sorghum 2,320 yuan/tonne and dried sorghum 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 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 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 flat today, of which Australian raw barley is 2,120-2,130 yuan/tonne at domestic ports. (Nantong port: Canadian raw barley for feed 1,850-1,860 yuan/tonne, French barley 1,770-1,780, and Ukrainian raw barley 1,730-1,740; Guangdong port: Ukrainian barley 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 7.03)