Alternative grains weigh on corn prices as substitution effect bites

Recently, corn prices have softened under the combined pressure of multiple alternative feed ingredients. The targeted release of aged rice for feed use, auctions of imported corn, concentrated arrivals of barley shipments, and the large-scale market supply of new-season wheat (including sprouted wheat) are collectively eroding corn's traditional dominance in feed rations. As a result, corn demand is relatively weak, and the procurement structure for feed raw materials is being reshaped.

Currently, price differentials among various alternative feed ingredients are clear, each offering distinct substitution advantages. The floor price for the oriented auction of aged rice is around Yuan 1,500/tonne. Cost estimates indicate that if feed enterprises buy the auctioned rice in producing regions, the cost is approximately Yuan 70–100/tonne lower than corn. Purchasing brown rice mixture is about Yuan 50/tonne cheaper than corn. Therefore, feed mills in Northeast China currently show a stronger preference for aged rice over corn.

Regarding imported corn, at the June 9 auction, floor prices in Liaoning ranged from Yuan 2,100/tonne to 2,150/tonne. Even after adding delivery fees, the prices remain below domestic corn in Liaoning, which is now around Yuan 2,320-2,340/tonne. Imported corn offers both cost advantages and stable quality, making it suitable for large-scale feed enterprises.

Imported barley is quoted at around Yuan 2,300/tonne at Shekou Port, compared to Yuan 2,480/tonne for corn at the same port, a price difference of approximately Yuan 180/tonne in favor of barley. Barley has higher protein content than corn and can better replace corn in ruminant feed, helping reduce costs.

Wheat substitution for corn is driven by both price spreads and nutritional benefits. Currently, corn purchase prices in North China stand at about Yuan 2,410/tonne, while ordinary wheat is around Yuan 2,460-2,470/tonne, a gap of only Yuan 50-60/tonne. Sprouted wheat in the south, due to lower quality, is priced as low as Yuan 2,220-2,240/tonne, which is about Yuan 200/tonne cheaper than corn and highlights its substitution advantage.

Nutritionally, wheat has a protein content of 13%-14%, more than 80% higher than corn, with a more balanced amino acid profile. Although its energy content is slightly lower (95%-97% of corn's energy), the energy gap can be fully compensated by adding compound enzymes. Wheat, especially sprouted wheat, offers triple advantages in price, nutrition, and supply scale, making it the most direct substitute for corn.

Given this market situation, corn faces significant substitution pressure from multiple sources, leading to notable price weakness. In the short term, the concentrated arrival of new wheat, ongoing auctions of aged rice, and increased imports of grains will continue to divert feed demand away from corn. Corn demand is unlikely to recover significantly, and the outlook for corn prices remains generally subdued. In the long run, price spread fluctuations between corn and other energy feed materials will reshape the feed rations dynamics.