Resilient corn demand likely to offset policy supply pre-CNY holiday

Currently, China Grain Reserves Corporation (Sinograin) is regulating the market through auctions and releases of imported corn. Under policy-based market controls, it is expected that there is unlikely to see significant price fluctuations before the Chinese New Year (CNY). However, supported by low channel inventories and pre-holiday restocking demand, spot market prices have been rather resilient.

Mysteel's survey found that the domestic corn inventories across various channels have remained relatively low, creating certain restocking demand ahead of the CNY. Specially, the ports in northern and southern China, as well as processing enterprises, have been generally operating with historically low inventory levels.

For instance, as of the week ending January 14, 2026, the total corn inventory across 96 major deep-processing enterprises nationwide stood at 3.59 million tonnes, down 42.57% compared to the same period last year, indicating downstream restocking demand yet to be fulfilled.

In the producing regions, farmers' grain sales progress has been relatively slow, with limited willingness to sell at low prices. As a result, pre-holiday concentrated selling pressure has been lower than expected, with the selling potentially shifting to the post-holiday period, meaning significant supply pressure has not emerged in producing regions before the CNY holiday.

While the market benefits from the above bullish factors, it also faces certain pressures. Firstly, the continuous release of policy-related grain sources (including imported corn) has effectively supplemented market supply and capped the upside potential of spot prices.

After the CNY in 2025, Sinograin increased corn purchases, offering additional support to corn prices. Although current corn prices are not as low as they were before the CNY holiday in 2025, it remains uncertain whether Sinograin will continue its purchasing activities after this year's holiday.

Secondly, downstream acceptance has been limited. The deep-processing industry is generally operating at a loss, with negative processing margins for both DDGS and corn starch. Livestock farming profits are also modest. If corn prices rise too sharply, downstream users may switch to more cost-effective alternatives.

Additionally, there is potential supply pressure. After the holiday, as temperatures rise, grain with higher storage challenges, such as floor-stored corn, may enter the market in bulk, potentially creating selling pressure.

Source:Mysteel

Overall, the corn prices are expected to move rangebound before the CNY holiday. Supported by essential restocking demand, a sharp decline in corn prices before the holiday is highly unlikely. However, constrained by downstream companies' weak profit margins, the extent of any price increase is also expected to be limited.

In summary, the current corn market is in a delicate balance between pre-holiday restocking demand and cautious expectations regarding future supply availability.

Written by Stacy Chen, chenyijuan@mysteel.com