The 4th week of corn market weekly report in 2010: The hoilstic price was down due to the negative effects of supply and demand situation

1.       Domestic market

The 4th week (January 25th ¨CJanuary 31st) in 2010, the spot price of the domestic corn decreased slightly with 10-40yuan per ton of the adjusted range. Due to the centralized arrival volume, the corn price of the southern ports continued to dwindle. With the sluggish demand in the selling regions, the price of northern ports decreased as well.

1.1 The grain selling was still in slow progress.

According to the analysis, as of January 15, the accumulating amount of the 2009 new corn of sundry grain enterprises from 10 major corn producing province such as Hebei, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Shandong, Henan, Sichuan, Shanxi and Gansu, was about 21.504 million tons, decreased 9.543 million tons. Among them, the purchasing amount of the national grain enterprises was about 4.553 million tons, accounted to 21% of the gross amount, and decreased 13.435 million tons compared with the some period of last year. As of January 15, the accumulating amount of the national temporary reserve corn from Inner Mongolia, Jilin and Heilongjiang was about 220,000 tons.

1.2 The northeastern deep processed enterprises was purchasing discreetly.

At present, in medium and western Heilongjiang areas, the listed price of the international medium quality corn of deep processed enterprises was about 1580-1600yuan per ton, and the selling price of farmers was about 1300yuan per ton, which was the same as last week. The holistic purchasing situation of deep processed enterprises in Jilin province was not optimistic, and the purchasing price seemed on the surface to be the same. Among them, the listed price of Changchun Dacheng was about 1640yuan per ton (BI), 1630yuan per ton (the third class), purchasing volume was merely hundred tons in three purchasing sites, and purchasing price of other deep processed enterprises was about 1600-1660yuan per ton. It was reported that, at present, the stock volume of most deep processed enterprises in northeastern regions merely would last for one month, which was apparently lower than other years, and the insiders were worried about the possibility of the downward price.

1.3 In North China, the purchasing volume increased while the corn price decreased slightly.

This selling enthusiasm of farmers was enhancing due to the good weather condition, and the supply volume rose slightly compared with last week. The deep processed enterprises purchased actively and the price dwindled slightly. Due to the weak local demand of the outward transportation, whereas the lack of policy support, the centralized supply of farmers caused the slumping of the price. As the price oscillated to fall, some enterprises purchased the corn actively, and the market was expected to flourishing.

This week, in Binzhou regions, the mainstream purchasing price was about 1880yuan per ton; in Langfang regions, the purchasing price of deep processed enterprises was about 1920yuan per ton; in Shijiazhuang regions, the price was about 1740yuan per ton and in Qinhuangdao regions, the price was about 1740yuan per ton, decreased10-20yuan per ton compared with last week.

1.4 The transaction volume continued to dwindle.

As of January 26th, the government had held the temporary national reserves trade fairs (information, market) at Anhui Grain Wholesale market (venues located in Heilongjiang, Jilin, Inner Mongolia and Liaoning), the volume of corn planned sale was about 501,500 million tons, the actual transaction volume was about 49,200 million tons, the turnover rate was about 9.82%. Among them, the 07 corn planned transaction volume was about 83,000 tons, the transaction volume was about 3205 tons, the transaction price was about 1860yuan per ton, and the turnover rate was about 3.86%. The 08 corn planned transaction volume was about 418,500 tons, the transaction volume was about 46,000 tons, the transaction price was about 1849yuan per ton, and the turnover rate was about 11%; in Heibei, Jiangsu, it failed to sell, while in Fujian, Guangxi and Yuannan, it had sold out. The turnover rate of this auction was successively lower than last week. The expected auction would be sluggish, and the transaction price would further decrease.

1.5 The corn price of the southern and northern ports decreased, while before the festival the price would be stable.

At present, the corn price of northern ports decreased and the hoilstic transaction was sluggish. In Beiliang ports, the mainstream price was about 1820-1830yuan per ton, and the freight capacity per day decreased from 300-400 to 300, the stock volume was over 500,000 tons. The price of Bayuquan was about 1810-1830yuan per ton and the stock volume was 400,000 tons; in Jinzhou port, the price was 1820yuan per ton, decreased 10-20yuan per ton, the purchasing price of the corn was about 1780yuan per ton with the moisture of 15.5%.

This week, the purchasing price of the corn with 15% moisture was about 1900-1910yuan per ton in Shenzhen ports, decreased 20yuan per ton compared with last week. At present, the stock volume of Guangdong ports was about 400,000 tons, the freighters would successively arrive at the port, and the arrival volume would be 200,000 tons. With the sufficient supply volume in Guangdong regions, the corn price of Guangdong regions would be down.

1.6 The future price of the domestic and foreign stock market was down successively.

This week, the CBOT corn future price continued to decrease, the main reasons were the weak international crude oil price. As of this Friday, the 1003 CBOT contract price was about 356.5 cents per bushel, decreased 8.25 cent per bushel compared with last Friday. The domestic Dalian corn price continued to dwindle. As of this Friday, the 1009 Dalian corn contract price was about 1854yuan per ton, decreased 23yuan per ton compared with last Friday. At present, without supportive factors of domestic corn fundamental facet, enslaved by the cost, the corn price had limited downward room and would haunt around the low point.

2.       Market analysis

With the Chinese New Year approaching, the grain volume of farmers would decrease. The purchasing market was sluggish and the profit of deep processed enterprises dwindled somewhat, the purchasing volume of traders gradually decreased as well. Therefore, domestic corn price would be down. However, the railway freight tension would affect the arrival volume of corn in the producing regions, which would restrain the downward room for the corn price before the Chinese New Year. The expected corn market would be sluggish and the supply pressure would shift to the further market. Lack of the funds in the corn future market, it would not stand out in the sluggish condition.

(Reference materials)

Table 1¡¡ Corn average prices in main regions (Yuan/ton)