The drought of the United States and Europe continues, and the northern hemisphere harvest is "baked". How can the international corn market interpret?

21st Century Business Herald reporter Shu Xiaoting Beijing Beijing report

On August 16th local time, the Chicago Futures Exchange (CBOT) corn, wheat and soybean prices fell across the board. Among them, the most active December contract of the corn market closed down 2.87%to $ 6.1025/Pu -Ear. So far this year, CBOT corn prices have risen 11.8%.

From late February to early March, the CBOT corn price has remained upward. The price of the three months has shocked at a high level in the next three months. The close at the close of US $ 7.8825/Pu -Ear on June 16. Since then, the price has shown a rapid decline. By a month, it fell 26.6%; the price fluctuated at $ 5.5/Pu-Ear-6.5 US dollars/puppet ear range from July 5th.

Xu Yoguang, a researcher at the National Futures Futures Agricultural Products Department, said in an interview with the 21st Century Business Herald that international corn prices may have the recent room for upward. After mid -September, they may return to the decline and maintain a downward trend, but it is difficult to fall deeply. He explained that in the short term, the focus of market attention lies in the impact of corn output on the output of corn production in the United States and Europe and South America, so international corn prices may have the possibility of upward. In the middle and long term, with the gradual recovery of the Food Foreign Transportation of the Black Sea, the margins of the global major grain supply and demand are gradually relaxed. In addition, the global grain price is highly related to the economic situation and the international oil price trend. The pressure above the corn is gradually increasing.

"With the critical period of critical growth of corn, soybeans and other crops in the northern hemisphere, the weather speculation window gradually approached the end. After the northern hemisphere output basically" coffin concluded 'in mid -September, the price of international corn may return to the decline. The probability of production is affected by dry weather, and the price of international corn prices has also been limited. "Xu Yoguang said.

High -temperature weather affects new corn output

Since the beginning of this year, multiple factors such as the evolution of the situation in Russia and Ukraine, the tightening of the Fed's monetary policy, and the arid weather affect the market's expected market expectations, which has caused the price fluctuations in grain such as international corn.

From the perspective of weather factors, the United States and the European Union are suffering from drought and high temperature in the production of corn production countries.

The United States is the largest corn producer in the world. At present, 10%to 20%of its annual output is used for export. Most of the US states are planted with corn. Among them, Iowa and Illinois are the two largest corn outputs in the United States, usually accounting for about 1/3 of American corn production.

From the perspective of seasonal laws, the US corn shredded period is from June to August, and the maturity period is from September to November. June to September is the key growth of corn. Since June, high temperature weather in the United States has continued, and currently exceeding 43%of states are experiencing drought. According to data released earlier this month, the US corn production area that the United States encountered about 31%. The growth of the US corn continued to decline by the growth environment. It reached 57%on August 7, which was lower than 58%in the previous week, 62%in the same period last year and 63.4%of the five -year average.

Based on the considerations such as weather and other factors, the US Department of Agriculture will reduce the expected US corn yield in 2022/23 on August 12 to 175.4 acre/acre, which is 1.6 pu -acre by expected last month. Lowed to 14.359 billion pu -ears.

"Overall, the US Department of Agriculture in August of the corn supply and demand report is profitable." Xu Yoguang said.

In Europe, European corn is mainly produced in the south, including Spain, southern France, and Italy. These areas continue to suffer from drought and extremely high temperatures, which will impact corn output.

France is experiencing the worst drought since the record in 1958. The country is an important European grain producer, and corn is one of the most affected crops affected by drought. Last week, due to the intensification of drought, the growth rate of French corn crops fell sharply. As of August 8, the excellent rate of French corn crops was 53%, the lowest level since 2011, lower than 62%of the previous week and 91%in the same period last year. The French Ministry of Agriculture recently estimates that the French corn harvest will be nearly 20%compared to 2021.

On August 12, the US Department of Agriculture lowered European corn production expectations. It is expected that the EU 2022/23 is expected to be 60 million tons. 10%lower than the average output of 5 years. Among them, Romania, Hungary, France, Italy, Spain, Slovakia, Bulgaria and Germany's corn production is expected to decline significantly.

"From the judgment of the continued impact of drought, the output of new European corn is highly reduced." Xu Yoguang said.

The adverse effects of high temperature and dry weather on the production of new corn are still fermenting. Zhang Xiaojun, a researcher at Green Dahua Futures Agricultural Products, told the 21st Century Business Herald: "During the key growth period of the new corn, the weather is still the focus of the market.

Global Grain supply and demand margins or gradually relax

Europe is the main corn import place in the world. Xu Yoguang said that under the influence of drought influence, the production of new European corn production is highly reduced. In the case of reducing production, the new year must be imported more corn in the Americas and Black Sea.

On July 22, Russia and Ukraine reached a parallel agreement on the Food Food of the Black Sea, which provided possibilities for the exports of more than 20 million tons of grain in Ukraine. Since the signing of the agreement, more than 10 freight vessels carrying grains such as corn have drove away from Ukraine ports including Odeza. Russia and Ukraine are important grain producers and exporters in the world. According to the United Nations Food and Agriculture Organization in June, from 2016/17 to 2020/21, Russia and Ukraine accounted for 18%of global barley, wheat and corn production, of which Russia accounted for 14%and Ukraine accounted for 4%. As far as corn is concerned, the total corn output of the two countries accounts for about 4%of the total global output, and the total number of corn exports between the two countries accounts for about 18%of global exports.

On August 12, the U.S. Department of Agriculture raised Ukraine's 2022/23 corn export forecast to 3.5 million tons to 12.5 million tons. At the same time, the output of Ukrainian corn in 2022/23 was 30 million tons, an increase of 20%over the previous month's forecast, but a decrease of 29%from the previous year. The latest period of grain supply and demand released by the United Nations Food and Agriculture Organization in early July pointed out that although Ukraine's corn output may decrease 30%compared with the average level of the past five years, official data shows that the amount of corn sowing is higher than before, so the corn of Ukraine's corn The output prospects have also improved.

In the short term, the main variable that affects the global corn supply is the rhythm and scale of Ukraine corn exports. In Xu Yatuang's view, with the gradual recovery of Ukraine's grain, the problem of imbalanced corn supply and demand has eased. He predicts that Ukraine's grain exports are expected to recover to the level of 90 % before the conflict, and Russian grain exports will exceed the level before the conflict. Based on this, the global main grain supply and demand level will gradually relax.

Zhang Xiaojun pointed out that the global corn supply and demand tight pattern will continue. This judgment mainly comes from the following data: The US Department of Agriculture in August is estimated to be 9.56%of the US corn inventory consumption ratio in 2022/23, which is still at the lowest level since 2016/17, which is only slightly higher than 2020/21 years. 8.33%; the global corn inventory consumption ratio of 2022/23 is 25.89%, which is still at the lowest level since 2016/17, only slightly higher than the 25.6%of 2020/21.

The Chinese corn market is relatively small

In recent years, the number of corn imports in China has gradually increased. In 2021, the total imports of Chinese corn reached 28.35 million tons, mainly from the United States and Ukraine. Since the upgrading of Russia and Ukraine in February this year, Ukrainian corn exports have been blocked, and China ’s imports of Ukrainian corn have been greatly reduced, and import sources have shifted to the United States and South America.

Since April this year, the number of corn imports in China has not increased significantly. As of August 4, China has purchased 14.71 million tons of corn in 2021/22, which has not changed significantly from the previous week. Among them, 1.2 million tons were not transported, less than 1.04 million tons from the same period last year; 13.51 million tons have been shipped, 7.12 million tons less than the same period last year. According to data from the General Administration of Customs, as of the end of June 2022, China has imported a total of 13.59 million tons of corn this year, compared with 15.3 million tons last year.

Considering the high cost of import costs and the profit of the import of corn in the United States, it takes time and facing uncertainty for the smooth operation of Ukrainian port transportation. Xu Yoguang pointed out that it is expected that China's corn imports this year are less than last year.

As far as the domestic corn market in China is concerned, Xu Yoguang said that the price of the outer disk will affect the import cost of China's corn and transmit it to the domestic corn price through import costs. However, considering that corn imports accounted for a small proportion of domestic supply, the impact of external markets on domestic corn prices was relatively small.

Zhang Xiaojun also said that China's domestic corn prices are relatively controllable due to the international corn market. She explained to reporters that although the gap in domestic corn production needs to be imported corn and grain replacement, the dependence of China's corn imports is less than 10%. The impact of market emotions has more obvious impact on the futures market. However, the domestic corn spot anchoring continuous corn futures and the stable operation of the spot market also helps the futures market. Therefore, China's domestic corn futures and spot prices mainly fluctuate around the domestic corn market supply and demand pattern.

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