Demand for domestic corn prices pulls a noticeable rise in corn has not ended

Even after the 1209 contract of corn was consolidated near 2380 points for two weeks, the power station stood at 2,400 points. Although the market is “highly fearful”, corn prices are still operating according to its rules. For investors, grasping the market rhythm and taking advantage of the trend are the best choices.

Since the fourth quarter of 2011, major economies in the world have joined the "loose team" one after another to boost the economy. According to Morgan Stanley's research, 16 of the central banks in the 33 countries or regions covered by its research have already taken easing measures. The loosening policies of the world's major economies have strengthened the expectations of increased market liquidity. Although this round of liquidity improvement is not as good as the global bailout of the central bank after the 2008 financial crisis, it also provided the impetus for the global economic recovery and enhanced bullish confidence in the commodity market.

The demand for domestic corn prices has driven a significant increase in spot price of corn after the Spring Festival, and it still maintains a strong operation. The market's expected post-holiday decline has not yet occurred. Judging from the rhythm of the current market buying and selling, the demand-pull increase in corn has not yet ended. In the northeastern production areas, due to the relatively small amount of remaining stocks and firm prices, the adverse effect of the farmers’ centralized grain sales is getting smaller and smaller. The price advantage of North China production areas triggered an increase in market demand. The number of purchasers of the main demand including the State Reserve Bank increased, and the price of corn increased steadily. The market is still in demand-driven.

After the Spring Festival, the funds promoters are still making efforts, corn futures trading is very active, and the price increase is inextricably linked with the promotion of funds.

The main position announced by Dashang revealed that the number of top 20 main positions after the Spring Festival was 157,800 lots, and the top 20 short positions were 136,100 lots. As of the close of February 27, the number of long positions for the top 20 main positions was 224,700, and the number of short positions for the top 20 main positions was 181,300. Before and after comparison, the main long positions were 66,900 lots, and the main short positions were 442,200 lots. Long positions for bulls were far more than short positions. Funds were bullishly expected to be strong, and the characteristics of the pull-up type of corn funds were obvious.

From the weekly chart, from the Spring Festival up until now, prices have shown a clear upward trend in the week when there has been a large inflow of funds. In the first trading week after the Spring Festival, that is, the week of February 3, the positions increased by 75,000 hands, corn prices rose by 45 yuan/ton; in the week of February 10, the positions increased by 91,000 hands, and the price rose by 34 yuan/ton; In the week of February 17 and the week of February 24, capital inflows slowed markedly, and prices showed a narrow range of adjustments. After the price breaks through the main threshold of 2,400 yuan/ton, there are signs of large inflow of funds, which can be used to judge that the rally is not over yet.

As a result, the cultivation of acreage of empty crops as an early season corn planting area is one of the focuses of the market, and it is also a bad factor that the market repeatedly mentioned. The forecast of 94 million acres of acreage announced by the US Department of Agriculture at the annual outlook forum on February 24th was considered the highest level since World War II, but this did not bring significant pressure on the market. The weather in the corn planting season in the United States and the weather in the key growing season in summer are still very uncertain. It is difficult to say that the planting area will increase and the high yield will be realized. Even with the high yield of US corn, the US domestic inventory level in 2011/2012 has dropped to the lowest point in 16 years. It is urgently needed to make up the stocks. The actual corn exports will not be as much as the market expected. Therefore, it is still too early to speculate on the negative impact of the US corn planting area. The rise in water is still a risk that needs attention.

Due to better comparative returns, the planting area of ​​corn in China this year is still expected to increase. However, labor costs have risen sharply, fertilizers, pesticides, and seed prices have been rising, and high costs will restrain the decline in corn prices. The labor costs in rice planting areas have increased by 25%, fertilizer input has increased by 17%, and the increase in corn planting costs may be equal to that. The high cost is enough to support prices.

In summary, the rising trend of corn has not yet ended. Whenever market adjustments look for long-term opportunities, the risk is far less than the contrarian short-selling.