Are there 4 signals indicating that the corn market is about to change?

With the rise of corn, there have been new changes, which are often interpreted by the market as new market signals.

These changes come from both the actual situation and the emotional level.

So, what changes have occurred in corn?

Firstly, the volume in Shandong has increased again.

Previously, there was a sharp increase in sales in Shandong, but prices fell. However, they rose again within two days of falling. There is no other reason for the increase, as the amount of corn has decreased.

But today we see that the quantity of corn has increased again, from nearly 300 yesterday to over 600.

Although there has not been a widespread decline yet, sporadic companies have already lowered their quotes.

So, does this mean that a new round of decline is about to begin?

This is not important, why is it not important?

Because Shandong has always experienced ups and downs, but what we need to pay attention to is the timing of the rise and fall.

Shandong corn went from falling to rising last weekend, and today, just two or three days after it rose, the volume has increased again.

This can only indicate one thing, which is that the grain holders do have the willingness to monetize and sell their grain.

Isn't there a strong bullish sentiment? Isn't it a game of raising prices? Why are you suddenly selling grain again?

This can only indicate two things, either quality concerns or a weakening of the upward potential for corn in the future.

From this, we can foresee that the Shandong market will enter a phase of frequent fluctuations in the future.

Secondly, the pressure of port inventory is evident.

This year, the progress of corn sales has been relatively fast, and the selling pressure after the new year has significantly decreased, which has also provided support for corn.

On the other hand, with the rapid transfer of grain sources, trade grain began to accumulate rapidly, one manifestation of which was high port inventory.

At present, the inventory of both North and South ports is at a high level. For example, as of early March, the corn inventory of the four northern ports reached 5.06 million tons, which is the highest level in recent years; As of mid month, the inventory of Guangdong Port has also reached 2 million tons, of which domestic corn accounts for more than 95%.

High inventory levels not only put pressure on supply and demand, but also test the stability of quality. Currently, the inventory pressure in Nanbei Port has become prominent, becoming an important factor in suppressing the corn market.

Thirdly, demand is limited.

From last year to this year, deep processing has been very strong, or in other words, it has played a significant role in boosting corn production.

Although deep processing is still supporting the market, some data shows that as of mid March, the inventory of deep processed corn starch was 1.361 million tons, which is also at a high level in recent years. Although the operating rate of enterprises is not low, it has also declined compared to last year.

In addition, after the rise in corn prices, the profits of deep processing have been damaged, and some regions theoretically have fallen into losses. Therefore, from the perspective of cost and profit, although there is a demand for replenishment in deep processing, the replenishment action will weaken with the rise of corn.

It is likely that there will be a sudden increase in price to boost production, but once the quantity is increased, the price will be lowered and the grain will be collected.

And feed enterprises are just one word - etc.

1、 The price of pigs is still rubbing against the cost line, causing a decrease in profits for the breeding industry and naturally leading to cautious demand for feed.

2、 It is currently not the peak season for pig prices, and after the rise in corn prices, feed companies have started to wait and see for wheat, so they are not actively replenishing inventory.

So theoretically, the supply and demand of corn are relatively tight, but at present, the pressure of supply has accumulated and demand has not been fully released, so strong supply and weak demand are secretly suppressing the rise of corn.

Fourthly, substitutes are right in front of us.

Why is it said to be right in front of you?

A few days ago, the auction of Chenhua rice in Heilongjiang fired the first shot in the rice auction. Although no new news was released afterwards, it was thought-provoking because theoretically, the auction quantity of Chenhua rice is around 15 million tons. When to auction and how much to auction will be a hidden concern for future corn.

On the other hand, the wheat market is gradually becoming clear. With the upcoming harvest of new wheat in May and June, the probability of high yield is high, and from the prices of purchasing new wheat from various reserve warehouses in both directions, the new wheat market is basically determined.

And as we analyzed before, under the four pressures, wheat will inevitably flow into the feed field, so the harvest and supply of new wheat will surge, and prices will inevitably be under pressure. Therefore, it is also a good opportunity to ｒｅｐｌａｃｅ corn and flow into the feed field.

So in the face of these four signals, corn is beginning to show signs of fatigue, but this does not mean that corn is going to plummet, but rather to trade time for space.

As the signal of peaking becomes more apparent, the upward trend is becoming increasingly weak, and it cannot be ruled out that there will be a periodic pullback after the small peak of corn has passed.