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Daily Review on Grain Market in China--2/12/2019

Today (Dec. 2), the market for grains in China is shown as follows:

Corn:

Domestic corn price keeps falling back today. The price prevails at 1,890-2,020 yuan/tonne among deep-processing enterprises in Shandong with a further decline of 6-18 yuan/tonne from last Friday. At Jinzhou port, Liaoning, the purchasing price of new corn in 2019 (moisture 14.5% and test weight over 720 g/L) is 1,830-1,835 yuan/tonne and the FOB price is 1,880-1,885 yuan/tonne; while the purchasing price of corn (moisture below 15% and test weight 690-700 g/L) is 1,810-1,815 yuan/tonne. At Bayuquan port, new corn in 2019 is traded at 1,810-1,820 yuan/tonne (test weight 690-700 g/L) down by 10 yuan/tonne from last Friday and 1,840 yuan/tonne (test weight 720 g/L) flat with last Friday. At Shekou port, Guangdong, the second-class corn is steadily priced at 2,000 yuan/tonne from last Friday but individually traded at 1,980-1,990 yuan/tonne.

The sales cycle of corn in market has shortened after entering December, and farmers intend to sell corn for cash before Spring Festival. And the morning volume of Northeastern deep-processing enterprises and ports increases significantly, so the phased supply will be loose consistently. However, traders are wary of stockpiling corn currently. Deep-processing enterprises keep cutting purchasing price under the increasing arrivals, and the prices today drop by 10-30 yuan/tonne compared with last Friday. If traders speed up the marketing of new corn, the market will be under pressure from falling back continuously in a short term. Nevertheless, the tight supply at Southern ports also brings support, which may limit the price declines in South area. Buyers can pay attention to the weather variations after December and the pace of selling of corn.

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 2,240 in Qiqihar and 2,440 yuan in Heihe. In Inner Mongolia, raw sorghum up 20 yuan to 2,320 yuan/tonne and dried sorghum 2,440 yuan/tonne in Hinggan League, and 2019 dried sorghum up 40 yuan to 2,480 yuan/tonne in Chifeng. In Jilin Province, dried sorghum up 20 yuan to 2,500 yuan/tonne in Songyuan and 2,340-2,360 yuan/tonne in Baicheng, raw sorghum 2,340 yuan/tonne in Qian’an, and raw sorghum up 20 yuan to 2,340 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. And growing port supply is also 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)