On February 4, the agricultural and sideline index was 1055, down 2 points from yesterday, 5.04% from 1111 (2012-Septmber-05), the highest point in the cycle, and 29.29% higher than the lowest point at 816on January 3, 2019. (Note: cycle refers to 2011-December-01 to now).

On February 4, the futures of agricultural products showed a bright performance. The feed raw material was in all-around red. And the corn, soybean meal and rapeseed meal rose in the early trading day. Driven by the futures market, the spot prices of corn and rapeseed meal rose one after another, with corn up 0.78% and rapeseed meal up 1.04% each day. Soybean meal and DDGS are relatively weak due to the fact that few enterprises have started up with most of them not offering to the outside. The market condition is quite fair. 

Bullish news supports feedstuff futures to rise in an all-round way.

On February 4, due to the delay of oil plant, the corn market was closed. The stock of feed raw materials was tight, and the futures market rose one after another.

Corn: In 2005, the dominated contract of Lian corn futures opened at 1926 RMB and closed at 1944 RMB, up 21 RMB.

Soybean Meal: M2005, the dominated contract of soybean meal futures, opened at 2589 RMB and closed at 2649 RMB, up 79 RMB.

Rapeseed Meal: Zhengzhou dominated rapeseed meal futures, rm2005 contract, opening price 2182 RMB, closing price 22 RMB, up 89 RMB.

Corn price goes strength after logistics transportation blocked

Affected by 2019-nCoV, many villages and roads were closed in the country. Sales of corn trading entities were stagnant. Market corn supply was tight. Some feed factories have not started up yet and downstream purchase prices rose. Corn stocks are low and the forecasting market is mainly bullish. Driven by the rise of corn futures market, corn prices are rising after the festival. Due to the blocked good flow, the market has a high price tag. 

Tight supply and two meal futures up

After China’s New Year, the price of two meal futures rose rapidly in the second trading day, with soybean meal up 79 RMB / ton and Zheng rapeseed meal up 89 RMB / ton. It is mainly due to the delay in the start-up of soybean meal and rapeseed meal production enterprises, which was further exaggerated by the tight inventory, the blocked logistics, and the supply gap in the market.  

In terms of soybean meal, most of plants mainly implement the contract, and do not offer temporarily, or implement the basis quotation. The quotation of some manufacturers is slightly lower than that before the festival. As there is little inventory, the soybean meal has a high price tag. 

In the aspect of rapeseed meal, the futures market supported, while the spot price rose with the price. The average market price was 2260 RMB / ton, and the price rose by more than 1% on that day.

Affect by poor end demand, DDGS goes weak.

Compared with the price of raw corn, the price of substitute rapeseed meal is higher. DDGS performance is poor, mainly due to the delay in the start-up of the end feed plant. Plus, there is some difficulties in purchasing raw corn, and obstacles in transportation. The DDGS manufacturers in Shandong did not start up, and the DDGS manufacturers in Henan mainly implemented inventory, with a slight drop in price. The DDGS manufacturers in Jilin area are mainly stable. DDGS's main quotation is 1700 RMB / ton, and the market has high price tags with weak market.

Market Forecasting 

Li Bing, an agricultural products analyst of SunSirs, believes that if the terminal feed factories resume operation and logistics resume one after another after February 10, feed materials will enter in a wave of replenishment market, and the future market is expected to usher in a wave of inflation.

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