Corn deep processing enterprises continue to enjoy the auction bonus?

On May 5th, the first shot of the prospective corn storage was finally opened, including 509,900 tons of corn produced in 2012 and before, importing 12,400 tons; in 2013, the loan was returned to 2.004 million tons of corn, from the year and quality. In view of this, a considerable amount of auction corn can only be used for deep processing or even fuel ethanol enterprises. The market generally believes that the northeast temporary storage corn auction is equivalent to the continuation of the policy dividend for deep processing enterprises.

The specific analysis is as follows:

Temporary corn auction started as scheduled

On May 5, the national temporary reserve corn started as scheduled in previous years. In 2012 and before, it stored 510,000 tons of corn. It belongs to the targeted sales of fuel ethanol enterprises. In 2013, the sub-loan also distributed 2 million tons of corn for public auction. The quality is not high. The difference is that with the implementation of the auction news and the auction bottom price, the spot market's attention to the temporary corn auction will shift from quantity to quality, or cost performance, especially in 2013, the third-class corn auction reserve price may be positioned 1250-1350 yuan. / ton, before the 2012 corn sales price may be positioned at 1,100 yuan / ton, the spot market has shown a considerable degree of resilience.

In addition, from the perspective of the auction of corn stocks released before the auction, the proportion of corn in Jilin and Heilongjiang is relatively high, and the indicators such as bulk density and imperfect grain are superior to Jilin, and the overall quality is not satisfactory. It is worth noting that at present, we don't know anything about the level of fatty acids in the reserve corn, and most of the grain-using enterprises and grain merchants in the south have scruples about this. After all, after using the temporary storage auction corn, last year, some well-known feed enterprises products. It has led to the problem of “yellow meat”. This year, I am not willing to repeat the same mistakes. Of course, it is feasible to use corn for poultry, blending and deep processing (especially alcohol processing). This is also the basis of our optimistic summer high quality corn/pig corn. the reason.

Directed sales just like extending subsidies?

Prior to this, the domestic corn market declined significantly. The third-grade price range of the third-class corn in the deep processing enterprises of Heiji was 1330-1550 yuan/ton, and the range was lowered by 20-70 yuan/ton. The current subsidized qualification of the northeast deep processing enterprises was at least two months. And the targeted sale of corn is equivalent to extending the subsidy time.

From the current performance of the northeast and north China corn market, the purchase price of corn in deep processing enterprises in the northeastern region is basically stable after the holiday, and the purchase price of 14% moisture third-class corn (the same below) in deep processing enterprises in Jilin Songyuan area is 1420-1440 yuan/ton, Siping. The regional purchase price was 1460-1480 yuan/ton, the purchase price of Heilongjiang Suihua area was 1400 yuan/ton, and the purchase price of Liaoning Tieling area was 1480-1500 yuan/ton, which was the same as last week.

According to the subsidy policy, the subsidy acquisition period for deep processing enterprises in Northeast China ended on April 30, and corn stocks generally reached 2-3 months. In May, the purchasing enthusiasm declined, the purchase price was stable, and corn arrivals were small. In addition, the northeast grassroots grain sources have bottomed out, especially the supply of high-quality corn is tight, supporting the northeast trading companies to raise prices. According to the monitoring of the National Grain and Oils Information Center, as of May 3, the progress of grain sales by farmers in the three provinces of Northeast China was 96% (including 96% of Heilongjiang grain sales, 95% of Jilin, 96% of Liaoning, and 95% of Inner Mongolia). In the hands of farmers, there is basically no surplus grain available, and about 1-2% of the corn produced in 2016 is in the hands of traders.

According to the transaction announcement, the grain source of the pre-storage in the previous period was to store corn in 2013 and before, and the space for pig feed, especially piglet, was limited. The high-quality corn scar will support its price in the later period. The high-quality corn in the hands is expected to go out of the independent rising market, the increase is expected to be 50-100 yuan.

In contrast, corn prices in North China have stabilized slightly

At present, the purchase price of 14% moisture third-class corn (the same below) in Weifang area of ​​Shandong Weifang is 1760-1780 yuan/ton, which is the same as last week; the purchase price in Binzhou area is 1700-1720 yuan/ton, down 10 yuan/ton from last week. . The Shijiazhuang area in Hebei was 1690-1700 yuan/ton, which was the same as last week; the Qinhuangdao area was 1620-1640 yuan/ton, down 20 yuan/ton from last week.

Henan Hebi area is 1710-1630 yuan / ton, down 10 yuan / ton from last week; Zhoukou area is 1700-1720 yuan / ton, down 10 yuan / ton from last week. The gradual reduction of corn storage in North China will support the price of corn in North China in May. According to the monitoring of the National Grain and Oil Information Center, as of May 3, the grain sales progress of farmers in North China is 80%, and the surplus grain is only 20%, of which the progress of grain sales in Shandong is 82%. Henan's grain sales progress is 80%, and Hebei's grain sales progress is 78%.

However, May is the early stage of wheat harvest in North China. Farmers and traders have demand for treasury. Before the wheat harvest, the supply of corn in North China increased slightly, which will restrain the price from strengthening.

The most noteworthy thing is that the temporary storage corn auction is about to be implemented. The cost of temporary storage of corn to the factory will become an important factor in determining the market price. The inter-regional price will also be re-adjusted based on this. According to market rumors, the reserve price is northeast. The cost to the North China region is above 1,650 yuan / ton. On the whole, it is expected that the price of corn in North China will be stable and oscillating in May, with the operating range of Shandong area being 1700-1800 yuan/ton.

May starch prices are stable and weak

Since May, domestic starch prices have been stable and weak. Up to now, the ex-factory price of starch in Jilin Changchun is 1950-1980 yuan/ton, and the price of starch in Liaoning Tieling is 2000-2050 yuan/ton, which is the same as last week; Shandong Binzhou The area is 2060-2100 yuan / ton, down 20 yuan / ton from last week; the ex-factory price of starch in Qinhuangdao area of ​​Hebei is 2050-2070 yuan / ton, down 30 yuan / ton from last week.

If we do not consider fixed costs and subsidies, the theoretical profit of processing 1 ton of corn in Jilin Changchun area is 247 yuan, up 6 yuan from last week; the theoretical profit of ton corn in Shandong Binzhou area is 125 yuan, down 4 yuan, taking into account the full cost (plus Fixed cost), the theoretical loss of corn in Shandong Binzhou area is 75 yuan. Since late March, the starch enterprises in Shandong have been processing losses at full cost.

Although the processing of starch enterprises in North China has entered a loss, the cash flow turnover is still normal, supporting enterprises to maintain high operating rates. At present, the operating rate of the domestic starch industry is 79%, which is the same as last week, which is 7 percentage points higher than the same period of the previous year. The operating rate in the northeast region is 77%, and the operating rate in North China is 85%. The northeast region is supported by the processing subsidy policy. The processing profit is high and the operating rate remains high. At present, the corn starch industry has a high operating rate, while the downstream demand has not improved significantly. The starch inventory pressure has increased, and the starch price has been suppressed.

On May 5th, the auction of corn for storage was started. Under the expectation of the auction, the traders’ reluctance to sell was weakened. In addition, North China was in the stage of the harvest before the wheat harvest. The difficulty in strengthening the price of corn would inhibit the increase of starch prices. According to previous rumors, the reserve price of the temporary storage auction may not be high, and the low cost of grain used by deep processing enterprises in North China will continue to suppress the price of starch.

May corn alcohol prices may fall

Since May, domestic alcohol prices have stabilized and declined. At present, the ex-factory price of alcohol in the eastern region of Heilongjiang (grade alcohol, including tax price, the same below) is 4300-4400 yuan/ton, and the ex-factory price of alcohol in Siping, Jilin is 4400-4500 yuan. / ton, both down 50 yuan / ton from last week.

The ex-factory price of alcohol in Weifang, Shandong Province was 4,800-4,900 yuan/ton, and the ex-factory price of alcohol in Nanyang, Henan Province was 4,400-4,500 yuan/ton, which was basically the same as last week. The price of corn in the northeast region is stable, the price of alcohol is falling, and the processing profit of alcohol companies in Northeast China is slightly lower. The theoretical processing profit of corn ale enterprises processing 1 ton of corn in Jilin Siping area was 117 yuan, a decrease of 28 yuan from last week.

If we consider deep processing subsidies, the profit of corn processing in Jilin area is 287 yuan, which is still the highest in recent years. The theoretical processing profit of processing 1 ton of corn in Nanyang, Henan is -29 yuan, which is the same as last week. At present, the operating rate of the domestic alcohol industry is 70%, which is 1 percentage point higher than last week. The operating rate in the northeast region is 84%, and that in North China is 58%. In the northeast region, the alcohol industry has a high operating rate, and with the support of subsidy policies, the high operating rate will remain in the next two months, while alcohol consumption will enter the off-season. Under the combined influence, the alcohol prices in the northeastern region are expected to be stable and weak.

On May 5, the state will release 510,000 tons of corn in 2012 and before, and the buyer will be qualified as a fuel ethanol processing enterprise and a deep processing enterprise such as alcohol and starch. This part of the grain source is expected to be priced according to last year's practice. Will be lower than the market price, the raw material cost of alcohol companies will decline in the later period, and also make processing enterprises have room to lower the price of alcohol.

Looking forward to the market

Looking forward to the market outlook, China's temporary storage corn will be auctioned in the first week of May. According to the 3-year reserve period, the 2012 production and the 2013 production of corn are all over-the-term corn, but there is no pressure on the use of deep processing enterprises, especially fuel ethanol enterprises. In terms of year and quality, a considerable amount of auction corn can only be used for deep processing or even for fuel ethanol companies. The targeted sale of corn is equivalent to extending the subsidy time.

At the same time, following the official announcement on May 3rd that the auction of 2012 and 2013 corn on the 5th, on May 4th, the official website of China Grain Storage announced that it will hold a special store for the storage of grain in the middle of the store on May 9th, and plans to sell the 2014 production. There are 859,500 tons of corn, including 33,500 tons of Tianjin, 29,900 tons of Hebei, 87,000 tons of Jiangsu, 146,100 tons of Anhui, 0.27 million tons of Fujian, 16,100 tons of Jiangxi, 195,700 tons of Shandong, 260,600 tons of Hubei, and 59,400 tons of Hunan. 1,150,000 tons in Guangxi and 17,000 tons in Sichuan.

This news officially broke the news that the rumors did not shoot the 2014 corn, the quality of the corn supply market is relatively good, so that the market demand subject wait and see psychology is further enhanced. (Special copywriter Mei Yu, article from Breck Agricultural Products Futures Network exclusive original)

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