July forecast of corn starch spot market

In June, the price of domestic corn starch spot market rebounded to a high level. After experiencing a period of continuous weakness and downturn in the market earlier in the month, with the help of strong raw material costs, increased manufacturers 'low price orders, and increased operating pressure, the spot market gradually changed from weak to strong. Prices are back to high ground. During the period, through the transfer of enterprise stocks from the internal to the spot market, the supply of downstream markets was supplemented, and the psychology of resistance to high prices began to intensify. The contradiction between market supply and demand was highlighted, the high price transaction was not good, and the spot price began to enter the stage of high volatility. According to Zhuochuang, the average price of the production area in June was 2385.6 yuan/ton, which was 1.7 % higher than the previous month and 17.2 % higher than the previous year. The average price of the sales area was 2,549 yuan/ton, which was 0.9 % higher than the previous year and 17.4 % higher than the previous year. According to the present situation, the market increase of corn starch is expected to be limited, and the falling space is also limited by production costs.

Look separately, first of all, the cost of raw materials. In June, the last month before the end of the subsidy of the Northeast Deep Processing Factory, the stock of raw materials in the company was high, and the overall supply of the market was relatively loose. Under the progress of maintaining the high investment in the reserve auction, the auction price of the auction grain was close to the auction price. The auction price is expected to continue to decline at the beginning of July. After the middle of the year, the auction price may have risen due to the market's satisfactory price expectations for September and the listing of new grain. The overall outlook for the end of the month may be stronger than the beginning of the month.

The price of raw materials in the North China market fluctuates frequently. In June, wheat was listed. After the corn experienced a concentrated amount, the manufacturers used more inventory and the market purchase price was more flexible. In July, corn was basically immeasurable in the season, and deep-processing enterprises mainly relied on the supply of Northeast grain. However, the inflow of Northeast grain was affected by factors such as logistics, weather, and mentality, and the supply and demand side of the market was slightly tightened in the later period. North China corn prices are expected to rise by 20-40 yuan/ton. The cost of raw materials is an important factor affecting the profit of starch. In June, the average monthly gross profit of Shandong corn starch manufacturers was 74.3 yuan/ton. During this period, the cost fluctuations were mostly passed on by the manufacturers through the control of starch prices. Therefore, this month, starch companies basically remained stable. Profit. Through the above analysis of raw materials can be seen, July raw material price trend overall strong, and starch enterprises to ensure the normal production of low prices to sell, spot prices or tend to stabilize the trend of strong finishing.

Second, supply and demand. Throughout June, under the background of increasing operating costs in the industry and tighter atmospheric management, some enterprises had to wait for the market with no limit on production maintenance or downtime, but the scope involved was small, and the industry operating rate was only 1.44 percentage points lower than last month. The market's overall supply remains high. In addition, the overall demand for downstream in the near future is not as expected. At present, only sugar companies can start construction. The rest of the downstream industries such as papermaking, food, pharmaceuticals and other industries have weak consumption of raw materials. In addition, the high price of recent production areas also inhibits some of the growth in demand. On the whole, the supply and demand side of the market is in a weak state, and the upward space of starch prices in July may be limited by the lack of demand.

Third, the enterprise mentality. Under the background of maintaining strong cost, the spot market in the near future is characterized by weak in North China and strong in Northeast China. The actual operating mentality of the manufacturers is more and more relevant to the reservoir. The stock base is slightly smaller enterprises choose to offer higher prices, using the market to buy a rising mentality to expand profits, enhancing downstream confidence. However, enterprises with poor goods are flexible pricing to ensure the stability of customer groups. Through the enterprise low price sale and cautious mentality can be seen that the follow-up corn starch market is difficult to appear large ups and downs, the price adjustment is more according to the stock situation narrow fluctuations.

Third, the enterprise mentality. Under the background of maintaining strong cost, the spot market in the near future is characterized by weak in North China and strong in Northeast China. The actual operating mentality of the manufacturers is more and more relevant to the reservoir. The stock base is slightly smaller enterprises choose to offer higher prices, using the market to buy a rising mentality to expand profits, enhancing downstream confidence. However, enterprises with poor goods are flexible pricing to ensure the stability of customer groups. Through the enterprise low price sale and cautious mentality can be seen that the follow-up corn starch market is difficult to appear large ups and downs, the price adjustment is more according to the stock situation narrow fluctuations.

Third, the enterprise mentality. Under the background of maintaining strong cost, the spot market in the near future is characterized by weak in North China and strong in Northeast China. The actual operating mentality of the manufacturers is more and more relevant to the reservoir. The stock base is slightly smaller enterprises choose to offer higher prices, using the market to buy a rising mentality to expand profits, enhancing downstream confidence. However, enterprises with poor goods are flexible pricing to ensure the stability of customer groups. Through the enterprise low price sale and cautious mentality can be seen that the follow-up corn starch market is difficult to appear large ups and downs, the price adjustment is more according to the stock situation narrow fluctuations.

Third, the enterprise mentality. Under the background of maintaining strong cost, the spot market in the near future is characterized by weak in North China and strong in Northeast China. The actual operating mentality of the manufacturers is more and more relevant to the reservoir. The stock base is slightly smaller enterprises choose to offer higher prices, using the market to buy a rising mentality to expand profits, enhancing downstream confidence. However, enterprises with poor goods are flexible pricing to ensure the stability of customer groups. Through the enterprise low price sale and cautious mentality can be seen that the follow-up corn starch market is difficult to appear large ups and downs, the price adjustment is more according to the stock situation narrow fluctuations.

Based on the above factors, Zhuochuang believes that the sluggish demand in the lower reaches of the market in the near future, the rebound in inventory pressure of some manufacturers, and the abundant supply of intermediate links all have a certain advantage over the high price of starch, and the performance in North China is particularly obvious. However, considering the operating costs and raw materials of the current manufacturers, the mentality of the market is still strong, the price is blocked, and the spot market is in a dilemma. Zhuochuang predicted that the spot price of corn starch in July may be running at a high volatility, and that prices will have a narrow upward space driven by costs, but at the same time the magnitude and height of price increases will be constrained by demand. On the whole, the adjustment range basically fluctuates within 20-50 yuan/ton, and the transaction negotiation space is more flexible.
Transferred from: China Starch Industry Association