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The recent decline in corn has been a bit tragic.

First, it has been declining for a period of time. Recently, North China, Shandong, and Northeast China have all fallen. Even Shandong, which has always looked at what is on the market, has seen a shortage of cars and continued to fall.

This is indeed a bit surprising.

As for the subsequent trend of corn, the current market has two views:

One believes that the general trend of corn is difficult to change, and there will be many subsequent shocks, making it difficult to return to the high point.

Another view is that corn is in the darkness before dawn and is about to break through the darkness and move toward light.

In view of the strong opposition between the two views, let’s analyze what is happening with corn.

1. Why does corn keep falling?

The decline in corn is mainly affected by three factors:

First, wheat has continued to fall recently, and wheat has always been regarded as the ceiling for corn. Now that the ceiling continues to move downward, it will naturally have a negative impact on corn. It also creates suppression.

Second, a round of rain continued in late June, causing some changes in the market.

In fact, after the rainfall, some corn is at risk of returning to moisture, and the yield increases. This is actually expected.

Third, international grain prices have been under pressure and have declined some time ago, giving up their gains, and some have even fallen back to the levels before the Russia-Ukraine conflict. This has made the entire market more bearish.

The fourth is market sentiment.

The soaring price of pigs is driven by market sentiment, and the falling sentiment of corn also has a great impact.

When multiple factors were superimposed, corn fell into a downturn, and the downturn caused market sentiment to also be depressed, so corn continued to fall.

2. Several conditions for corn to rise

But is corn really unable to fall? New Agricultural View believes that this is not necessarily the case. The current market has entered a situation of multi-party fragmentation, but there are also some factors that are good for the rise of corn.

First, the trend of the international market has more impact on emotions. Because the domestic grain market is relatively independent, it is relatively less directly affected by international grain prices.

Besides, international food prices did not just fall. Facts have proved that after a short fall, they started to rise again. After all, the rise in food prices is not driven by a single factor, so it must fall back. It requires a combination of multiple factors, and obviously it’s not that easy.

The second factor is domestic supply and demand that determines the price of corn.

On the supply side, it is true that the corn planting area has decreased this year, by approximately 12 million acres. In addition, the weather in the Northeast is unstable, so the output and quality are variables; on the other hand, imported corn has always been the domestic demand. It is an important supplement to the gap between supply and demand. However, due to the impact of the international situation this year, the cost of imported corn and domestic corn has rarely been inverted, and imported corn has been suppressed.

In the long run, the inversion between import costs and domestic prices will not continue like this. In the end, either import costs will fall or domestic prices will rise. As we just said before, international grain prices will rise. If the price does not meet the conditions for a sharp drop, then the most likely possibility is that the international part will fall, the domestic part will rise, and finally a new balance will be reached.

Third, we said earlier that the continued decline is mainly affected by emotions, but emotions are also a double-edged sword. When the decline reaches a certain level and triggers the cost and benefit of traders to build warehouses, there will be price resistance. .

So emotions do not develop in one direction.

Fourthly, although the demand for deep processing has decreased due to shutdowns and maintenance, feed companies have increased demand due to rising pig prices. It is expected that there will be a gap by the end of the month and the beginning of next month, and there is still a long way to go before new corn is launched. For a certain period of time, this also leaves room for corn to rise.

Conclusion

In fact, it can be found from recent trends that with the rebound of the international market and the recovery of the futures market, the decline of corn in the domestic market has slowed down. However, in view of the decline in wheat The shock will continue for some time, so the chance of corn rebounding in a short period of time is not high, but we need to pay more attention to the market changes from the end of the month to the beginning of the month, which may change.

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