Lost! Wheat is "falling" and the corn market is "out of control"

Lost! It came to an end in March 2023. With the approaching of the listing cycle of new wheat, the market staged a wave of decline. Wheat fell and the market fell. The quotation of local milling enterprises bottomed out at 1.45 yuan/kg, and the market did not improve significantly. The price difference between wheat and corn has been narrowing, the grain market has completely changed, and the corn market has also "failed"! So what happened in the market?

Judging from the wheat market, in the past two days, mainstream milling enterprises in domestic wheat producing areas have started a comprehensive price reduction model. Wheat prices fell 10 ~ 40 yuan/ton, and prices fell. The quotation of mainstream milling enterprises has fallen below 1.5 yuan/kg, and the quotation of many enterprises in Henan has bottomed out 1.45 yuan/kg!

The sharp drop in wheat prices is rooted in the pressure of mismatch between production and sales in the market. Due to the downward trend of international food prices, the pessimism in the domestic wheat market is heating up. Due to the relatively loose supply of wheat, some dealers closed down, and the phenomenon of stop loss and grain breakage continued. The temporary storage of wheat and the minimum purchase price are constantly put on the market, the local wheat is constantly out of the warehouse, and the wheat supply is loose! However, the demand is extremely bleak. Due to the poor demand for terminal flour, the market of wheat bran, a by-product of flour enterprises, has fallen, the operating rate of enterprises is hovering at a low level, and the price of spot wheat is on the high side. The price of domestic mainstream milling enterprises has dropped to about 1.45~ 1.525 yuan/kg!

Wheat prices are lower, the market is "completely lost", the corn market is also under pressure, and the market is "out of order"! Previously, due to the acceleration of grassroots grain sales in domestic corn producing areas, the corn spot market gradually showed a bottoming trend. However, the corn market has fallen again recently, and the market sentiment is tense again!

On the one hand, the price of wheat is lower, and the possibility of wheat feeding is gradually increasing. At present, some feed enterprises in Henan, Shandong and other places have successively purchased feed wheat. However, due to the further decline in wheat prices, the trend of supplementary feeding of wheat will be further revealed. At present, the price difference between wheat and corn in Shandong is less than 100 yuan/ton, and the enthusiasm of feed enterprises to supplement corn is weakened, which poses a negative pressure on the spot corn market!

On the other hand, the number of tide grain corn is increasing, and the demand has not kept up well! At present, in the domestic corn producing areas, Northeast China, North China, Huanghuai and other places, the sales progress of corn in the mainstream market is above 80%, and the surplus grain at the grassroots level is gradually decreasing. However, due to the warmer weather, grass-roots tidal grain is still in the stage of capacity release. Due to the downward trend of wheat prices, farmers' enthusiasm for prices has loosened, and the market circulation of corn has increased again. Enterprises in Northeast China, Shandong and other places have successively cut prices, and the corn market is weak!

In addition, from the market feedback, the current corn market has not stopped falling, and domestic purchase and sale have gradually shown a double-low trend, while domestic corn imports have continued to increase. Around mid-March, domestic traders purchased more than 3.07 million tons of American corn, and corn imports increased significantly. The reason is that international food prices have fallen sharply, and the price of corn in the United States has hit a new low. The cost of imported corn is only about 2630 yuan/ton, which still has a certain price difference with spot corn.

To sum up, due to the sharp drop in wheat prices, the corn market is once again under pressure, and the grass-roots tide grain is acceptable, while the inventory of channel dealers and deep processing enterprises is gradually relaxed, and the spot corn market is still weak! Although the domestic corn self-sufficiency rate is above 90%, and the corn output in 2022 is 277 million tons, corn still needs to be imported in large quantities. Therefore, in the medium and long term, there is a certain gap in domestic corn supply, and the price is still rising, which may have some anti-support for the wheat market! According to institutional analysis, the corn market will gradually enter the rising cycle in April, and the price of wheat will gradually pick up!