According to the China stock market news choice terminal, as of 15:00 Beijing time on March 3, the main contract of China’s corn futures rose again by 7 yuan / ton to close at 2893 yuan / ton, up 11.26% this year. At the same time, the price of corn futures on the Chicago Mercantile Exchange (hereinafter referred to as CBOT corn futures) has also strengthened all the way.
As one of the main feed raw materials, the rising price of corn puts pressure on the operation of feed enterprises. Small and medium-sized feed enterprises that rely on imported corn and have low inventory will face the dilemma of “waiting for rice to go to the pot”. Just last week, many pig feed enterprises issued price increase letters. Since March, many poultry feed enterprises have issued price increase letters to transmit cost pressure to the downstream of the industrial chain.
Insiders suggested that in addition to raising the transmission pressure of feed prices, feed enterprises should carry out hedging as soon as possible and use “futures + insurance” to hedge against price increases; Breeding enterprises should actively develop grain saving technology, increase the local corn supporting industry, stabilize the upstream raw material supply, and assist feed enterprises to iron out the risk of feed fluctuation; The decision-making level should integrate the current situation to determine whether the auction time point, auction batch and auction quantity of corn reserves should be adjusted to supplement the market supply gap.
corn futures prices remain high
In recent days, the main contracts of China’s corn futures have risen all the way, reaching a new high since 2007, and the CBOT corn futures price has also reached a new high since 2015. Why is the trend of international and Chinese corn futures similar and “high”P align = “center” the main contract of China’s corn futures has reached a new high in recent years (photo: China stock market news) p align = “center” the main contract of international corn futures has reached a new high in recent years (photo: China stock market news)
Li Binbin, Shenzhen Agricultural Products Group Co.Ltd(000061) analyst of huinong.com, told reporters: “Corn is one of China’s bulk commodities, and its import scale has remained high throughout the year. In particular, China’s corn import volume in 2021 increased by 152.2% year-on-year compared with the previous year, reaching 28.35 million tons, far exceeding the total tariff quota of 7.2 million tons by the customs in 2021. In 2021, the import of corn and substitutes also reached a record high, with a total import of 50.25 million tons in the whole year. In 2021, China’s total corn output was 272.55 million tons, with a total import of 20.25 million tons Corn and substitutes have accounted for 28.83% of the total output. With the increasing scale of China’s corn imports, the linkage effect of international and Chinese corn prices is becoming increasingly obvious. “
He further analyzed the current price trend of corn futures: “The main contract of corn futures has reached a record high, which is affected by many factors. Weather factor is one of the main factors. In recent years, the frequent occurrence of La Nina and El Nino has led to drought, flood and secondary disasters in the main producing areas of corn, which is not conducive to the increase of per mu yield of corn. The booming consumption in the downstream is another main factor. In recent years, feeding with corn as the main raw material The vigorous development of industries such as material processing, grain and oil processing, biochemical pharmacy and fuel ethanol, and the accelerated consumption of stored corn have objectively increased the reluctance of market suppliers to sell. The sharp rise in oil prices also has a certain supporting effect on the planting cost of corn. The rise in oil prices will raise the prices of chemical fertilizers, pesticides and agricultural gasoline and diesel. The rise in agricultural materials is not conducive to farmers’ enthusiasm for corn planting. “
He added, “in recent days, the geopolitical conflict has intensified, and both countries are major corn exporters, which has also exacerbated the concerns of the international market about the stability of corn supply. In particular, Maersk and Mediterranean Shipping announced the suspension of cargo booking in a country, and the market is worried about the obstruction of the country’s grain sea export channel, which has exacerbated the short-term volatility of the corn market.”
feed enterprises solve the problem of “waiting for rice to cook”
Due to the short-term rapid rise in the price of international corn spot futures, it has been inversely linked with China’s corn spot futures, putting pressure on feed enterprises dominated by imported corn. In order to transmit this pressure, feed enterprises have issued price increase letters.
From January to February this year, some feed enterprises such as New Hope Liuhe Co.Ltd(000876) , Tangrenshen Group Co.Ltd(002567) , Tongwei Co.Ltd(600438) , Hunan Zhenghong Science And Technology Develop Co.Ltd(000702) , Hunan Changye and Dongguan Zhengda successively issued price increase letters to raise the prices of pig trough feed and piglet concentrate.
Since March, many poultry enterprises have issued price increase letters. Among them, Ganzhou twins raised the chicken and duck feed by 100 yuan per ton and the medium and large chicken, medium and large duck and egg duck feed by 75 yuan per ton. Nonghao agriculture raised the price of duck, chicken, goose and quail by 3 yuan per package. Jiangxi Liyuan raised all its poultry feed by 75 yuan per ton. Ganda poultry raised its egg chicken and quail materials by 100 yuan per ton and egg duck, meat duck and pigeon materials by 75 yuan per ton. Fujian Hualong raised its chicken feed and pigeon feed by 75 yuan per ton and duckling feed by 100 yuan per ton. Jiangxi Haida, Fuzhou Zhengbang, Tequ group, Kedi biology, Zhejiang Orient Gene Biotech Co.Ltd(688298) etc. also raised the price of their poultry.
A senior person in the futures industry told reporters: “According to the investigation, the feed enterprises are obviously uneven in happiness and bitterness. The feed enterprises with planting bases and high inventory can still cope with the impact of price rise. The pressure of feed enterprises relying on imported corn as the main raw material is doubled. Some small and medium-sized feed enterprises with low inventory are about to face the dilemma of” waiting for rice to go to the pot “. At present, they mainly rely on grain and oil processing by-products and peers Adjust corn to maintain production. “
He further added, “Due to the continuous rise of international and Chinese corn futures prices, it is expected that there will be reluctance to sell new corn after it is listed in April this year, which is difficult to alleviate the pressure of feed enterprises dominated by imported corn in the short term. We suggest that large feed enterprises should resolutely adopt hedging to hedge some rising risks. We also designed a solution of ‘futures + insurance’ according to the needs of small and medium-sized feed enterprises A solution to help them tide over the difficulties. “
He added, “We suggest that the decision-making level should comprehensively consider the current situation, timely adjust the time point and auction quantity of corn reserve auction, move the time point of corn reserve auction forward, and increase the auction batch and quantity at the same time, so as to make up for the supply gap in the corn spot market, stabilize the possible reluctance to sell in the market and help cool the mood in the corn futures spot market.”
Feed enterprises are under pressure, and downstream breeding enterprises are also taking precautions and preparing to jointly hedge risks with feed enterprises. On March 2, Liu Yonghao, member of the National Committee of the Chinese people’s Political Consultative Conference and chairman of New Hope Liuhe Co.Ltd(000876) group, introduced the “special action of New Hope Liuhe Co.Ltd(000876) ” to strive to improve the comprehensive efficiency of feed use every year, that is, to save 1% of grain consumption every year. “
Tangrenshen Group Co.Ltd(002567) Board Secretary sun Shuangsheng also said, “We conduct hedging operations through the futures market to avoid the risk of price fluctuation of feed raw materials such as corn and soybean meal, control procurement costs, and reduce the pressure caused by the rise of feed raw material price by adjusting feed formula; in terms of breeding business, we mainly reduce the pressure of feed price rise by optimizing feed formula and implementing precision feeding.”
The Pengdu Agriculture & Animal Husbandry Co.Ltd(002505) staff mainly engaged in beef cattle breeding also said, “Corn is also the main component of beef cattle feed. We have been concerned about the rise in corn prices. In order to iron the purchase cost and ensure the supply of corn, we have established corn planting bases and feed processing bases with farmers and cooperatives in many places in Yunnan, actively expand the local sources of raw materials such as jade rice, so as to ‘have rice in hand and don’t panic’.”
