Corn Market Prices Were on a Strong Run in March and Possibly Would Go Down in the Near Future

In March, corn market prices stabilized, but ascended in the main production areas, especially in the northeast. The average price was RMB 40/MT higher than last month. The main reasons for an increase in corn prices in the production areas are as follows:
(1) Sinograin started to purchase grain for rotation in some areas of northeast, boosting local prices. Of which, Sinograin Siping Depot has started to purchase grain for 2020 rotation since March 20^th. Corn purchase prices (second-class and above) were RMB 1,860/MT, higher than market prices. Boosted by that news, local corn prices went up quickly.  
 
(2) Grain traders in the northeast all are optimistic about the price trend and are more willing to stock up the goods. Besides, a decline in railway logistics costs is good for purchasing and the radius of northeastern corn to other places is increased, which leads to a rapid fall in surplus grain owned by the farmers in the northeast. Surplus grain owned by the farmers in the northeast was expected to be only 30% at the end of March.  
 
(3) In March, the demand for corn in March also maintained at a high level. Of which, the demand for feed recovered, and increased by 10% month on month; further processing companies remained normal production, increasing the purchase volume of grain. 
 
However, corn market prices in the domestic possibly would go down in the near future.
 
(1) The imports of corn and its substitutes would ascend obviously. Corn imports arrival at the ports reached 0.9322 million MT from January to February, up 64.8% year on year. From March to April, the imports of 0.4 million MT from Ukraine would arrive at the ports. Along with the outbreaks of novel coronavirus and the fluctuations of financial market, March CBOT corn futures prices hit the lowest in the last three years. China has imported more 1 million MT of cereals such as sorghum, corn and wheat from the US. It would be a peak of cereal imports arrival at the ports in May, which would occupy the demand room of feed corn.
 
(2) Influenced by a sharp decline in international oil prices, domestic corn further processing margins descended obviously, and the stocks of corn starch companies hit a new record. In March, main further processing companies such as corn starch and alcohol generally fell into loss, which would influence the demand for corn in the near future.