playingbaccaratonline| Talking about corn on the weekend: channel treatment

Source: legend of Grain and Lake

Talk about corn on weekends

This block is produced by Cofco Futures Xiamen Branch.PlayingbaccaratonlineUpdate the analysis and operation strategy of corn futures every Saturday.

The company is rooted in the agricultural products sector, which is mainly based on oils and oils, grains and aquaculture, and provides R & D analysis based on basic data, public information and the correlation changes of various commodity categories. By providing investment advice for different investment instruments, asset classes and specific targets, it serves customers of financial institutions and participants in the real economy.

[abstract] Federal Reserve minutes are partial to the eagle, and funds have withdrawn; Meimai strongly boosts international grain; domestic wheat market suppresses the room for corn to rebound; whether the auction of imported corn and other grains reappears needs vigilance, and farming sentiment has improved. The growth in demand for deep processing is limited.

01

Macroscopic part

Minutes of the Fed's May meeting: a number of officials are willing to tighten policy further if necessary. Long-term neutral interest rates may be higher than previously expected. Officials discussed the need to keep interest rates unchanged for a longer period of time, or to cut interest rates in the face of a weaker labour market. Some officials note the risk that the financial environment is too loose. After the minutes were released, traders reduced their bets that the Fed would cut interest rates more than once this year. (we need to be on guard against the fall of unfulfilled interest rate cuts, and the main logic of the rising market is "inflation". )

Schnabel, the ECB executive, said a rate cut in June would be possible if the data confirmed expectations; the eurozone economy appeared to have "recovered slightly"; and it was hoped that inflation would return to the 2 per cent target without experiencing a recession. (Europe probably took the lead in cutting interest rates by the Federal Reserve.)

Solomon, chief executive of Goldman Sachs, said he now does not expect the Fed to cut interest rates this year because the economy has shown greater resilience thanks to government spending. Investment in artificial intelligence infrastructure has also made the economy more resilient in the face of the Fed's monetary tightening. The macro uncertainty is still relatively high.

02

Current situation

At present, the "ground grain" is basically sold, and then it depends on the selling pressure of grain on the stack. At present, domestic corn prices are gradually stabilizing. After the Spring Festival, due to factors such as the second increase in grain reserves, the suspension of imported corn, and the normal guidance of traders to actively buy such things, corn rebounded all the way, standing above 2400. Recently, there have been some new rumors in the market, such as increasing reserves, reducing imports of corn and wheat, speeding up the digestion of aging rice in stocks, and so on. When there is no specific policy to reverse the intention to increase inventory in the middle and lower reaches, it is still prudent not to be too optimistic. At present, the market supply is still relatively sufficient, small and medium-sized traders and terminals still maintain rolling rotation, rigid demand procurement, there are no signs of a reversal of attitude. The advantages of imported barley and corn are still the resistance to the rise of domestic corn in the future, which should not be underestimated. At present, there is no major contradiction, and it is expected that the oscillatory operation will be maintained in the coming months. Pay attention to the report on American farmers at the end of March (acreage intention report).

The last period is considering the channel to continue or break through the bottom channel to take a wave of rising market, at present, it will be treated as the channel; there may be a small pullback, but the overall shock is still strong. Domestic corn futures 09 contract channel: hovering between 2420-2520, there is not much bullish drive, then pay attention to the possible potential downside factors, such as import auctions or alternative grains; in the short term, the demand side should not change much.

According to the weighted trend of US corn, it is still in a state of not going up or down, and we need to be vigilant that "it will fall for a long time". Without a bullish story, funds may continue the short mood. (highest point 484Playingbaccaratonline.5 the connection between the high point around March 12 and the high point around March 12 is regarded as the upper boundary of the channel, while the lower boundary is the connection between the lowest point 419 and the low point of April 19, paying attention to whether the follow-up support for the decline of US corn is near the lower boundary (458); it is currently in a neutral state and can be empty in the short term.

From the following regional price difference image and the quotation table, the price of the northeast port is the strongest and the rebound is the strongest. Shandong is still the weakest, and the upside-down caused by quality problems has not yet been repaired. The sales in Northeast China are basically completed, the surplus grain is in the hands of traders, and the high cost plus the small amount of surplus grain in Northeast China makes it imperative to raise the price, which is also the main logic that the editor is optimistic about.

After reading several research reports on the wheat market, the current market opening price is about 1.15-1.25 yuan, which should be slightly lower than the previous market estimate of 2500-2600 yuan / ton, so can the price of corn still go up to 2500-2600? If it can be replaced, it will happen again. According to the editor's follow-up judgment, this year's sprouts will be less than last year's, and last year is the first time to encounter such a large-scale incident inexperienced; this year is likely to be at the same pace as last year, but the fluctuation is less than last year. At present, international wheat prices are still relatively strong, and the European frost story supports the strength of wheat. The price gap between domestic wheat and corn is unlikely to be as extreme as last year. There are only a few issues left. Just simply post a few data for reference to the supply and demand situation.

The red part considers the import of forage grains, and the arrival in Hong Kong in the third quarter may be weakened, and there may still be a long way to go in the fourth quarter. (the editor's channel is limited and welcome to share). The blue box considers deep-processed starch (whether the reduction of cassava increases the demand for corn starch should not look too bad). The price difference of rice noodles mainly refers to the processing profit, and the influence of by-products becomes smaller in the short term, and the main factor is the price of corn and corn starch itself.

In terms of breeding: the spot market of live pigs, the average price of live pigs nationwide last week was 15.3 yuan / kg, an increase of 1.9% month-on-month and 7.3% over the same period last year. The market is expected to improve this week and prices are gradually strengthening. The average price of 15kg piglets in the country is about 690 yuan per piglet. Last week, the apparent loss of self-breeding was 15.2yuan per head, and the apparent profit of fattening piglets purchased was 132.2 yuan per head. Last week, the national average weight of hurdles was 125.3kg, with a month-on-month decline of 0.1kg, of which more than 150kg accounted for 4.37% of the hurdles below 90kg accounted for 3.58%. The weight of all the hurdles has dropped slightly. Breeding profits have improved, secondary fattening is optimistic about the market situation.

[corn base spread and futures spread]: the basis spread rebounded as expected.

[inventory data]

Mysteel data shows:

[Beigang inventory]

As of May 17, corn stocks in the four northern ports totaled 3.666 million tons, an increase of 27000 tons compared with the previous week. In that week, the total volume of corn in the four northern ports totaled 79000 tons, a decrease of 109000 tons.

[Nangang inventory]

As of May 17, 2024, domestic trade corn stocks in Guangdong Port totaled 694000 tons, down 45000 tons from last week; foreign trade inventories 425000 tons, down 7000 tons from last week; imported sorghum 463000 tons, down 55000 tons from last week; and imported barley 897000 tons, down 7 million tons from last week.

[starch inventory]

As of May 22, the total starch inventory of corn starch enterprises nationwide was 1.04 million tons, down 77000 tons from last week, a weekly decline of 6.89 percent, a monthly decline of 17.20 percent, and a year-on-year increase of 9.82 percent.

[deep processing corn inventory]

As of May 22, the total corn inventory of processing enterprises was 5.184 million tons, a decrease of 1.22%.

[starch on]

This week (May 16-May 22) the country's total corn processing volume was 650500 tons, 2100 tons less than last week; weekly national corn starch output was 331300 tons, 1400 tons lower than last week's output; and the weekly opening rate was 65.5%, 0.28% lower than last week. (note: on May 22, 2024, the operating rate on that day is 67.52%)

03

Hot news

[United States]

1. The premium on wheat and corn in Chicago surged this week to $2.3950 a bushel, the highest level since October 10, 2022, analysts said. This huge price gap will boost feed demand for corn in the United States. The USDA will release its weekly export sales report on Thursday. Analysts estimate that total corn sales for the week ended May 16 were between 75 and 1.65 million tons, compared with 720000 tons a week ago.

Average ethanol production rose to 1.019 million barrels a day in the week to May 17 from 1 million barrels a week earlier, within market expectations, according to the US Energy Information Administration (EIA). Ethanol stocks fell to 24.21 million barrels, down from the previous week, but within analysts' expectations.

According to estimates by the American Automobile Association (AAA), the number of people driving during Memorial Day is expected to exceed pre-epidemic levels and reach the highest level since 2000.

2. Foreign media reported on May 22nd: in the United States Bay, the spot price of No. 2 yellow corn in June was US $5.0275 per cattail, equivalent to US $197.9 per ton, up 3.25 cents from the previous trading day. The Louisiana Bay basis is 41 to 42 cents higher than CBOT's July corn price.

In central Illinois, corn processors offered an average of $4.5358 per cattail of yellow corn No. 2, up 5.75 cents from the previous day; the basis price was 26 cents lower to 3 cents higher than CBOT's July corn price.

3. Washington, May 20: the weekly export inspection report of the United States Department of Agriculture shows that the amount of corn export inspection in the United States last week increased by 20 percent compared with a week ago, but decreased by 9 percent compared with the same period last year.

In the week ended May 16, 2024, US corn exports were inspected at 1210541 tons, compared with a revised 1004571 tons last week and 1328829 tons in the same period last year. When the United States shipped 273852 tons of corn to China, it did not ship corn to China last week.

So far, the inspection volume of US corn exports in 2023 to 24 is 35211044 tons, up 28.6% from the same period last week, up 30.3% from the same period last week, and 32.6% from the same period last week.

The inspection volume of US corn exports reached 64.5% of the USDA's forecast, up from 62.1% a week ago.

[Brazil, Argentina]

4, foreign media May 21 news: Brazilian Foreign Trade Secretariat (Secex) statistics show that May corn exports are still depressed, but the next few months are expected to grow seasonally. Brazil's second-season corn production accounts for more than 70% of the annual output, and the harvest usually begins in June and competes with US corn in the global market in the second half of the year. From May 1 to 17, 2024, Brazilian corn exports were 162300 tons, up from 96650 tons a week ago and 384885 tons for the whole month of May last year.

Brazil has exported an average of 13525 tons of corn per day so far in May, down 22.7 percent from 17494 tons in the same period last year. Corn exports have reached $340 million so far in May, compared with $1.27 billion for the whole month of May last year. The average price of corn exports so far in May was 210.7 US dollars per ton, down 36.4 percent from 331.1 US dollars in the same period last year.

For reference, Brazil exported 66000 tons of corn in April, down 86% from a year earlier, 431000 tons in March, down 68% from a year earlier, and 1.71 million tons in February, down 25% from a year earlier.

5. According to the Buenos Aires Grain Exchange (BAGE), as of May 15, the progress of the Argentine corn harvest in 2023 in 2004 was 25.4%, an increase of 2.0% over the previous week, while the previous week's harvest was 1.3% higher. The yield of corn harvested is 16.1 million tons, up from 15.31 million tons a week ago. The average yield per unit area was 8.40 tons per hectare, which was lower than 8.68 tons per hectare a week ago.

The situation of corn crops in Argentina has declined. The proportion of poor ratings was 46% (42% a week ago, compared with 53% in the same period last year); the excellent and good rate was 14% (17%, 4%); and the average rating was 40% (41%, 43%). In terms of soil moisture in the corn belt, the adequate proportion is 85%, 85% a week ago and 50% in the same period last year. On 8 May, the Rosario Grain Exchange lowered its forecast for Argentine corn production by 2.5 million tons, from the previous forecast of 50 million tons to 47.5 million tons, as leafhoppers spread widely and caused serious damage to crops.

6. According to the monthly report released by the Argentine Ministry of Agriculture, it is estimated that the sown area of wheat in the coming year 2024 will be 6.15 million hectares, an increase of 4.2 percent over the previous year's 5.9 million hectares.

The government said in its monthly report that economic conditions, soil moisture and possible La Nina weather could all affect wheat acreage. Official figures show that Argentina harvested 15.9 million tons of wheat in 2023 in 24. The government says the soil moisture in most farmland is good, and if it is maintained at an appropriate level before the planting date, it will have a positive impact on wheat planting decisions. But given the impact of wheat prices and the possible La Nina weather phenomena, the planting outlook remains uncertain.

[Russia, Ukraine]

7. Foreign media reported on May 22nd: according to the Statistics Bureau of the Russian Federation, as of May 1, the grain and legume stocks of Russian agricultural enterprises stood at 18.4 million tons, a decrease of 10 per cent compared with the same period in 2023. Wheat stocks were 11.3 million tonnes, down 6 per cent from a year earlier, while corn stocks were 1.9 million tonnes, down 10 per cent from a year earlier. The inventory of oilseeds was 2.4 million tons, down 29% from the same period last year. Of this total, the stock of sunflower seeds was 1.1 million tons, down 31 per cent from the same period last year.

8. Foreign media reported on May 21: the consulting firm IKAR said on Tuesday that the Russian wheat production forecast for the year 202425 was reduced by 2.5 million tons, from 86 million tons to 83.5 million tons. If the forecast becomes a reality, it will be 10 per cent less than the 92.8 million tons produced in 2023. 24. IKAR also cut Russian wheat exports by 2 million tons in 2024, to 45 million tons from the previous forecast of 47 million tons. IKAR on Tuesday cut its forecast for total Russian grain production to 132 million tons from 135 million tons, which will be 8.9 percent lower than the 144.9 million tons produced in 2023. Russian grain exports in 2024x25 are expected to be 57 million tons, lower than the previous forecast of 59.5 million tons.

9. The export tariff on Russian wheat will be lowered by 1.9%. From May 22 to 28, 2024, the export tariff on Russian wheat and mixed wheat was 3109.7 rubles per ton. By contrast, the export tariff for the period from 15 to 21 May was 3170.7 rubles per ton. The Russian government recently increased its grain export quota by 5 million tons, bringing the total grain export quota between February 15 and June 30, 2024 to 29 million tons, up from 25.5 million tons last year. Between December 11, 2023 and April 12, 2024, the Russian Ministry of Agriculture bought 962700 tons of grain for the State intervention Fund, valued at 13.696 billion rubles. Russia plans to buy as much as 2 million tons of intervention grain this year.

[other]

10. Foreign media reported on May 20: as of May 15, 2024, the cost of grain shipping from the United States and South America to China fell.

According to data released by the US Grain Council, the freight rate for a 66000-ton freighter from the United States Bay to the port of China (North or South China, the same below) is $53.45 per tonne, down 80 cents from a week ago.

The freight rate for a 66000-ton freighter from American West to Chinese ports was US $27.41 per ton, down US $0.57 from a week ago.

Freight for ships of 54000 to 59000 tons from the Brazilian port of Santos to China was US $47.66 per ton, down US $2.01 from a week ago, while freight from the northern coast of Brazil to China was US $29.56 per tonne, down US $1.67.

The freight of 56000 to 60, 000 tons of deep-water cargo ships from the Argentine port of Rosario to China was US $54.03 per ton, down US $0.87 from a week ago.

04

Operation strategy

The probability of channel vibration is large, and the space is limited.

Lido: 1, the cost of grain merchants to build a warehouse is high; 2, import control attitude; 3, demand is expected to improve; 4, South American weather and insect pests; 5, North China surplus grain toxin is high, surplus grain corn is not much, cherish sales price; 6, temporary storage wheat stop auction; 7, local reserves purchase wheat; 8, follow-up imports are reduced

Negative: 1, 23 shock 24 global supply is expected to be sufficient, which is a loose year; 2, 23 prime 24 domestic corn is also in the fundamentals of increasing production; 3, substitutes and imported grains are sufficient; 4, 2024 GM seed industrialization further; 5, wheat is about to be on the market, local toxins may be on the high side, the balance price forecast is not very optimistic; 6, grain auction and other uncertain factors.