The corn market in Central China concluded the first half of 2026 on a weak note, with prices adjusting continuously due to grain flow, terminal demand, and the impact of substitutes. Corn futures declined in July, intensifying market bearish sentiment. Currently, regional corn supplies are ample, compounded by negative factors such as livestock farming losses and wheat substitution, putting pressure on feed demand. It is anticipated that the purchase price for corn in Central China will continue its slight downward trend in the third quarter.
The price trajectory for corn in the Central China sales region showed significant divergence in the first half of 2026. In the first quarter, supported by strong bullish sentiment in production areas and tight inventories, corn purchase prices remained high, overall exceeding levels from the same period last year. Taking Wuhan, Hubei as an example, the average purchase price by downstream enterprises in March was 2,525 yuan per ton, an increase of 85 yuan per ton from the January average. The market landscape gradually shifted in the second quarter. As trade grain from the Northeast production areas was successively shipped out, incremental market supply was released, initiating a slow decline in Central China corn prices. By the end of June, the average purchase price for corn in Central China was 2,500 yuan per ton, aligning with the price from the same period last year.
Terminal Feed Enterprise Inventories Also Low
Corn inventories at feed enterprises in Central China this year have generally been lower year-on-year. In the first quarter, influenced by the transmission of rising grain prices from Northeast production areas, feed enterprises saw shrinking production profits, leading them to proactively reduce inventories to hedge risks, causing industry inventory levels to continuously decline. In the second quarter, fluctuations in regional corn inventories narrowed, maintaining a low and steady state. Concurrently, spot corn prices continued to fall, coupled with intensified losses in the downstream livestock farming sector. This exacerbated bearish sentiment among feed enterprises regarding future markets, prompting a widespread strategy of purchasing as needed and operating with low inventories. Overall, the industry's willingness to build inventories remains weak.
Ample Grain Supply in Q3, Production Area Offtake Demand Persists
In previous years, corn supplies in the Central China sales region came from two main channels: Northeastern grain and North China grain, with the latter supplementing regional supply gaps. However, this year, the North China production area has been affected by prolonged rainy weather, leading to prominent issues with corn mold and excessive toxins. The grain quality failed to meet standards, rendering it unsuitable for the feeding material standards of Central China's feed enterprises. Against this backdrop, corn supplies in Central China this year have almost entirely originated from Heilongjiang, Jilin, Liaoning, and the Tongliao area of Inner Mongolia. Northeastern grain sources offer excellent quality, meeting the needs of downstream feed processing. Simultaneously, at this stage, the trade sector in Northeast production areas faces significant sales pressure. Corn inventory levels in the Northeast this year are higher than the same period in previous years, and dried grain has poorer storage durability. Combined with the high temperatures and sultry weather in July, risks of corn spoilage due to accumulated heat are rising, prompting strong sales intentions among traders. There is an expectation of increased corn supply to the Central China market. Additionally, in mid-to-late July, spring corn from southern regions will gradually come to market, supplementing local supply.
Dual Negative Pressures in Q3 Weaken Corn Feed Demand
Feed demand for corn in Central China has been generally weak this year, primarily suppressed by two core factors: losses in the livestock farming industry and large-scale wheat substitution. There remains room for further decline on the demand side. On one hand, livestock and poultry farming profits have been poor this year, with the industry sustaining losses. Feed enterprises have faced sluggish finished product sales and inventory accumulation, leading to significantly lower procurement enthusiasm compared to previous years. To control costs and mitigate risks, enterprises have continued to compress raw material inventories, keeping rigid demand for corn purchases persistently low. On the other hand, the substitution rate of new-season wheat for corn continues to rise, significantly diverting corn consumption. Following the wheat harvest, feed enterprises in Central China widely adopted feed formulations incorporating wheat substitution. This year, sprouted wheat issues in Hubei are prominent, with overall quality varying. Some enterprises mix in high-quality wheat from North China. Currently, wheat substitution for feed remains at high levels, with potential for further increase. The substitution ratio can exceed 50% for feed enterprises focused on domestic sales, while it ranges between 20% and 30% for those focused on external sales. The diversion by multiple substitutes, coupled with weak feed demand, continues to squeeze corn consumption for feed in Central China. Most enterprises in the region currently maintain corn inventories for 20 to 30 days of consumption. Awaiting the arrival of spring corn in late July or early August, there is no clear intention to replenish stocks significantly.
Market Outlook for Central China Corn
Considering the current supply-demand dynamics in the Central China sales region, the overall trend for corn prices in the third quarter is expected to remain weak, with further downside potential. Traders have a high willingness to sell, and low-priced sprouted wheat, over-aged rice, and imported corn continue to divert feed demand. Entering August, the gradual market arrival of spring corn will further amplify supply pressure. Only extreme weather events in production areas or changes in the pace of policy-related grain releases could trigger short-term sentiment-driven rebounds. However, these are unlikely to reverse the overall weak trend. Corn prices in Central China are expected to fluctuate downwards overall in the third quarter. It is forecasted that the purchase price range for corn in Central China will be 2,440-2,520 yuan per ton in July, down approximately 10 yuan per ton; 2,430-2,510 yuan per ton in August, down approximately 10 yuan per ton; and 2,420-2,510 yuan per ton in September, down approximately 5 yuan per ton.
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