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Drought Attracts Funds in Corn Market

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2014-08-07 12:26:00 来源:大连商品交易所网站 
Since the end of June, the domestic spot corn market has been in the stage of accelerating increase, with the enterprise purchase prices and port trimming prices even reaching record highs. Driven by strong momentum of the rising prices on the spot market, the dominant 1501 Contract of the corn futures saw the transaction price hit a new high since its listing.

Spot market prices rising more rapidly

Since the end of June, with the corn stocks nearly depleted, Shandong market has seen the deep-processing enterprises hike the purchasing prices of spot goods so as to attract the grain sources. As of early August, the corn purchasing price of the deep-processing enterprises in Weifang, Shandong Province was RMB 2,800 / ton, hitting a record high, with the deep-processing enterprises in Zhucheng, Shouguang and other places offering the purchasing price as high as RMB 2,790 / ton. The spot enterprises" demand for replenishing stocks has pushed up the corn prices.

Meanwhile, with the declining corn stocks at ports in South and North China and the robust costs for the auctioned corn of temporary storage delivered to ports, the port trimming price has been boosted to a new high in nearly three years. The trimming price at ports in North China went up from RMB 2,460 / ton at the end of June to RMB 2,560 / ton in early August, an increase of RMB 100 / ton; the trimming price at ports in Guangdong rose from RMB 2,540 / ton at the end of June to RMB 2,720 / ton at the end of July, even up by RMB 180 /ton. The accelerating growth of spot prices has laid solid foundation for the rapidly increasing corn futures prices.

Auctions of temporarily stored corn pushing up corn cost prices

From the beginning of the auctions for the temporary storage on May 22 to July 31, Anhui Grain Wholesale Market and the networking markets conducted 11 rounds of auction. According to the statistics of the auctions for the temporarily stored Northeast China corn, the trans-provincial cross-warehouses corn in South China and temporarily stored corn imports, the 11 rounds of auctions recorded a transaction of 18.44 million tons of corn compared with the sales plan of 48.07 million tons, representing a turnover rate of 38.36%.

Paying attention to the impact of drought

A proverb says, “The yields around the fifteenth day of the eighth lunar month depend on floods or droughts around the fifteenth day of the seventh lunar month.” Just as the main corn production areas in China enter the critical period of growth, the drought has appeared in some parts north of the Yangtze River, especially in Henan, Hebei and other areas where the corn needs a lot of water in the critical period of growth. The drought has caused a lot of funds to flood in the corn futures market, with the 1501 Contract reporting a trading volume of more than 200,000 contracts and an open interest of over 300,000 contracts on August 4. The “weather-affected market” plus the “funds-affected market” has expanded the increases of the futures prices.

In summary, driven by the robust trend of spot goods, the corn futures prices have kicked off the trend of climbing step by step. With the evolution of the “weather-affected market” and the “funds-affected market”, the investors are reminded to pay attention to the risks of significant price fluctuations in the short term.
(责任编辑:HF046)

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