From November 5th, after the domestic corn market was slightly reduced at the end of October, the demand side again heard the price increase, Shandong deep processing enterprises began to raise the purchase price, the increase was within 30 yuan / ton, many factories broke through 2,000 yuan /Ton. On the other hand, the deep processing enterprises in the northeastern producing areas have also changed their low-key styles and drastically raised the offer price, which in turn led to a comprehensive recovery in port prices. On the supply side, the corn planting subsidy has received much attention. Finally, on November 7, 2018, the distribution of funds for corn producers in Heilongjiang was officially launched. The standard for this year is the legal planting area of 25 yuan/mu. The subsidy is legally planted with an area of 320 yuan/mu, which can be said to be a difference. What is the impact of such disparity and the shrinking corn subsidies on the corn market? How will the domestic corn market change? China Grain and Oil Information NetworkAnalystZhou Wei believes that the shrinking of corn subsidies will inevitably affect the farmers' mentality of selling grain, and will further stimulate price increases in the short term.
The corn subsidy dives and the grassroots reluctant to sell. At the current stage of the corn market, due to the strong reluctance of farmers to sell, the shortage of new grain supply in the market has caused tight demand in the demand side, and the offer price has been raised continuously. The price of corn has shown an upward trend. This year's corn production subsidy is 25 yuan/mu, which is down by 108 yuan/mu compared with last year. The corn subsidy has been lowered for three consecutive years. The large shrinkage of subsidies will inevitably affect the farmers' income from planting, which will make farmers more firmly reluctant to sell, by reducing supply. The way to coerce the demand side to raise the price of corn to fill the gap in the income caused by the subsidy diving.
In the long run, the state will adjust the crop planting area through subsidies, the diving of corn subsidies and the surge in soybean subsidies will have a great impact on the cultivation of new season crops next year. The enthusiasm of farmers to grow corn will be hit, and the conversion of soybeans will increase. The reduction in corn acreage will also significantly reduce the corn supply capacity in the distant months, which will benefit corn prices.
Warm winter and late seasons are environmentally friendly, and new foods are delayed. The extreme weather since May has also caused the second-class seedlings and three types of seedlings in parts of Heilongjiang and most of Jilin, and the “three generations in the same place” in the field, the growth is uneven, and the maturity period is delayed, which also creates new grain supply capacity. The shortage has supported the rise in corn prices. At present, the harvesting in the northeastern producing areas is basically completed, and whether the new season corn can concentrate on hitting the market has become the next negative point. However, under the environment where farmers are generally reluctant to sell, the negative factors are once again lurking and waiting for opportunities.
(Article source: Pig Price Network)