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Daily Review on Grain Market in China--11/9/2020

2020-11-09 www.cofeed.com

Today (Nov 9), the market for grains in China is shown as follows:

 

Corn:

 

Corn prices in China continue falling today. And the average price is 2,442 CNY/tonne nationwide, down 13 CNY/tonne from last Friday. The price among deep-processing enterprises in Shandong prevails at 2,470-2,600 CNY/tonne with partial decrease of 10-20 CNY/tonne from yesterday and 6-50 CNY/tonne from last Friday. At Jinzhou port, Liaoning, the purchasing price of 2020 new corn with volume weight of 720 g/L (moisture within 15%, impurity with 1%, mildew with 2%) is 2,455-2,460 CNY/tonne, down by 20 CNY/tonne from last Friday but unchanged with yesterday. At Bayuquan port, Liaoning, new corn of 2020 with volume weight of 720 g/L (moisture within 15%, impurity with 1%, mildew with 2%) is priced at 2,455-2,460 CNY/tonne, a drop of 20 CNY/tonne from last Friday. At Guangdong port, Grade-II old corn price is 2,550 CNY/tonne, flat from last Friday. The purchasing price of Grade-III new corn offered by Longfeng company in Suihua Qinggang, Heilongjiang is 2,280 CNY/tonne, unchanged from last Friday.

 

The profit margins are widening as wet corn prices stay at a high level in Northeast area, but the price is declining in recent days, so some farmers are more willing to sell corn stocks in hand. Besides, on Nov 9, there are 757 trucks waiting to get unloaded in earlier morning in Shandong Province, which still stay at high level despite a decrease compared to yesterday. In this case, some deep-processing enterprises further reduce the price by 10-20 CNY/tonne with a decline of 10-50 CNY/tonne from last Friday. Additionally, Chinese government is projected to grant more import quota in the new crop year, said an industry source familiar with the matter. Therefore, corn imports are expected to increase, dampening market’s bullish sentiment. Corn futures stop rising and start falling today, and corn price at Southern and Northern ports drops by 20 CNY/tonne from last Friday. Accordingly, short-term corn market is still under pressure from going down. Moreover, China’s corn market supply tightens due to a production reduction in main producing regions, coupled with reducing corn released under policies, so traders are bullish about the market outlook and have strong sentiment to hoard corn. And the overall corn market will maintain the high level, and participants can pay attention to new corn sales and sales mentality.

 

Sorghum:

 

New domestic sorghum prices are stable with a decline today. As new sorghum planted area and production suffer a reduction under the influence of typhoons this year and an expansion in other crops, its starting prices hit a historical high and farmers show strong sentiment in propping up prices. Markets in main producing provinces of Shanxi, Inner Mongolia and Jilin have strong sentiment for higher prices. Moreover, distillery owners have to make purchases for daily requirements. In addition, grain depots are strict about crop moisture with the marketing of new sorghum, which also highlights its quality and prices. These combine to drive sorghum prices to continue rises. But traders and grain depots are cautious due to high prices, so that sorghum shipments are at a slow pace, which is weighing down the market.

 

Imported sorghum prices steady with a rise in China today. Market participants are concerned that escalating U.S.-China tensions could affect future imports of sorghum. Moreover, new U.S. sorghum crops are still under harvests, and the cost of importing sorghum is also strengthening due to the coronavirus pandemic. In addition, domestic holders now have small stocks of Australian sorghum amid tensions between China and Australia. However, imported sorghum stocks at Guangdong ports still total 196,000 tonnes as of Oct 30. And an expected rise in sorghum arrivals will probably weigh down US sorghum prices in China. Participants can focus on US-China relations.

 

Barley:

 

Imported barley prices steady today. China has halted barley imports from Australia’s largest grain exporter whose shipments were found with pests on multiple occasions, further disrupting barley trade between these two nations. Moreover, some domestic feed manufacturers also start using barley as corn prices remain high, which also bolsters barley prices. Merely, imported barley stocks totaled 548,000 tonnes at Guangdong ports as of Oct 30. While there will be vessels arriving gradually in coming months, the overall demand remains weak, which will be negative to the market. In addition, barley shipments from Argentina, Canada and France have been flowing toward China as a conflict between China and Australia reshapes global trade pattern, which is also undermining domestic barley market. Overall, imported barley prices are predicted to stay stable in China.

 

(USD $1=CNY ¥6.61)