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Daily Review on Grain Market in China--6/12/2019

Today (Dec. 6), the market for grains in China is shown as follows:

Corn:

Domestic corn price stays stable with individual declines today. The price prevails at 1,874-2,010 yuan/tonne among deep-processing enterprises in Shandong with individual declines of 6-10 yuan/tonne yesterday. At Jinzhou port, Liaoning, the purchasing price of new corn in 2019 (moisture 14.5% and test weight over 720 g/L) is 1,830-1,835 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 and the FOB price is 1,860-1,865 yuan/tonne. At Shekou port, Guangdong, the second-class corn is priced at 2,000 yuan/tonne but individually traded at 1,980-1,990 yuan/tonne steadily from yesterday.

The sales cycle of corn in market has shortened. As some farmers have to sell corn for cash before Spring Festival and traders in Northeast and North regions are more willing to sell corn, the marketing volume is increasing steadily. However, some enterprises and traders have yet to stockpile corn, so it will remain under pressure from supply in phases. Moreover, some enterprises lower the prices by 10-20 yuan/tonne further, facing pressure of falling back in the near term. Nevertheless, many depots in Northeast China start the grain procurement, which provides the psychological support for the market. Meanwhile, some businesses will replenish stocks successively in mid-to-late December. Both bull sides are giving support for the bottom of market. And this may limit the retreat of market outlook. Thus, buyers can pay attention to the weather variations after December and the pace of selling of corn.

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 2,320 yuan/tonne and dried sorghum 2,440 yuan/tonne in Hinggan League, and 2019 dried sorghum 2,480 yuan/tonne in Chifeng. In Jilin Province, dried sorghum 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 2,340 yuan/tonne and dried sorghum 2,460 yuan/tonne in Taonan. In Shanxi, raw sorghum 2,300 yuan/tonne in Xinzhou.) 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, which in turn weighs down imported sorghum prices. However, it is still hard for US sorghum to go into Chinese market in the short term as there is no substantial progress in trade negotiations between two countries. A lack of a effective rise in domestic supply is propping up prices at ports. Short-term prices are predicted to keep steady with narrow fluctuations. Participants can pay attention to the outcome of trade negotiations. The weekly sales report by the USDA showed that sorghum sales totaled 128,000 tonnes to China, and the shipment of 128,000 tonnes to China that week is a new high this year. 

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 7.04)