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Prices have gone up! Here’s a price hike list from feed companies across major regions nationwide.

Release date:

2020-10-04

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As new grain continues to hit the market, the fierce scramble for corn has already begun! Not only are prices starting high and opening early, but they’re also rising rapidly. Meanwhile, many companies and traders are already rushing to harvest corn cobs directly from the fields!

Affected by the earlier typhoon weather, corn in Northeast China has suffered widespread lodging, prompting some regions to begin harvesting ahead of schedule. Currently, fresh corn from Heilongjiang and Jilin provinces is already being delivered to processing plants. Compared to 2019, this year Northeast China's deep-processing enterprises have started purchasing new grain nearly 7 to 10 days earlier. Currently, more and more companies are starting to purchase the new harvest: Cargill Biochemicals, Yihai Kerry, Fujin Xiangyu, Heilongjiang Chengfu, and Suihua Haotian have all begun collecting the new grain, with opening prices significantly higher than last year—up by 300 to 400 yuan.

Heilongjiang Fujin Xiangyu starts pricing at 14% moisture content at 1.0019 yuan, and at 30% moisture content, it’s 0.80 yuan.

Heilongjiang Suihua Haotian has started trading at 14% moisture content for 1.005 yuan, and at 30% moisture content for 0.812 yuan.

Jilin Cargill Biochemical opened at 14% moisture content for 1.05 yuan, and at 30% moisture content for 0.8316 yuan.

Liaoning Yihai Kerry sets the opening price at 14% moisture content at 1.08 yuan, and at 30% moisture content at 0.8726 yuan.

Ningxia Yipin Bio sets the initial listing price for new grain at 1.15 yuan.

This week, early shipments of the new-season corn have begun arriving in select areas of Jinzhou and Anshan in Liaoning Province. As of September 16, the purchase price for fresh, wet corn in Liaoning reached 0.87–0.88 yuan per jin. Meanwhile, higher prices for newly harvested corn—and farmers’ reluctance to sell—have provided significant support to the current market dynamics. From September 6 to September 16, corn prices in Liaoning have already climbed by 60–70 yuan per ton, marking a stark contrast compared to the same period last year when prices were much lower.

Recently, manufacturers in North China have also seen a reduction in supply volumes, accompanied by a slight increase in prices. As harvesting begins across various regions, new corn is set to enter the market in increasing quantities. By October, with nationwide corn supplies expected to surge, prices are likely to find some support during that month.

Futures are the vanguard of corn prices.

Since September, corn futures prices have surged sharply at one point. On September 17, the 2101 contract climbed another 29 yuan, driving up spot prices and also influencing traders' willingness to sell grain. Particularly amid the impact of the typhoon, concerns about reduced corn yields in Northeast China have intensified, further boosting farmers' reluctance to sell their crops.

So far this year, corn futures prices have risen by more than 28%. On September 14, the main domestic corn futures contract for delivery in January 2021 hit a six-year high of 2,450 yuan per ton.

In this year's sharp rally in corn prices, corn farmers weren't the biggest beneficiaries—instead, traders who had already secured large volumes of spot corn earlier emerged as the real winners. Last year, traders generally purchased corn at around 1,600 to 1,800 yuan per ton, but now corn futures prices have surged to nearly 2,400 yuan per ton. Floating profits exceed 600 yuan per ton.

However, a spokesperson for the National Bureau of Statistics said at a press conference held by the State Council Information Office on Tuesday that as new corn enters the market, the upward price trend will noticeably slow down. Under market forces, there is both the foundation and the conditions to keep corn prices stable.

International corn prices rise

China's strong demand is driving up international corn prices, with corn futures on the Chicago Board of Trade (CBOT) already surging by 15% since August.

A Singaporean trader stated that China's high corn import volumes are tied to the country's domestic production situation. Recently, corn crops in Northeast China were severely damaged by typhoons, prompting market expectations that China's demand for corn imports will rise. The trader noted that local yields have already suffered losses of 10% to 15%, equivalent to at least 10 million tons.

China has been a major buyer of U.S. corn, consistently purchasing large volumes and now becoming the leading importer of American maize. Industry sources estimate that China has already bought a total of 9 million tons of U.S. corn, with deliveries scheduled for both the 2019/20 and 2020/21 marketing years—and purchases are expected to continue. Traders anticipate that the total volume could climb even higher, potentially reaching 20 to 30 million tons.

According to data from the U.S. Department of Agriculture, China's highest-ever annual corn imports from the United States occurred in the 2011/12 fiscal year, reaching 5.337 million tons.

Overall, driven by the widening domestic supply gap and rising global prices, corn-based feed is expected to experience another significant surge in the coming period. In the short term, however, factors such as policy adjustments, import pressures, and fresh grain availability are likely to trigger a gradual pullback. Meanwhile, high-quality corn will remain the primary focus of competition throughout the year.