Chapter 322: Soybeans are just over, and corn is coming again (thank you for your monthly tickets)
China's soybean consumption ranks second in the world, but its import volume is far 2006, China imported about 2800 million tons of soybeans.
In 2007, the forecast data given by two major professional institutions in the United States were both around 3000 million tons, accounting for 34% of the global trade volume.
Soybean oil imports are forecast at 280 million tons, accounting for 28% of global soybean oil trade.
Although this trade status does not give China pricing power, the international soybean price is now rising rapidly, and genetically modified soybeans no longer have a price advantage...
As news of China's extraordinary increase in soybean production spread, the American grain and oil market was thrown into chaos.
No matter what, I'll fall first as a sign of respect.
Chicago soybean futures contracts fell sharply.
The two major professional organizations, Informa Economics and Oil World, were all panicked.
Just last month, Informa Economics predicted that China's annual soybean production would be 1530 million tons.
Oil World gives the figure as 1480 million tons.
And now China’s answer to the world is 3000 million tons!
What kind of international joke is this?
It doubled!
To describe it as a slap in the face is an understatement, this is face-riding output!
Those farmers and businesses who have been subscribing for a long time have already cursed the two major organizations!
"It's a sad fact that the trustworthy informer made such a stupid mistake. It was twice as bad as them. My grandma would do better than them."
"If I meet someone from Oil World right now, I will pull out my gun and kill him!"
“Informa’s president Hernan Marc was interviewed two days ago and he talked a lot about the tightening global soybean supply, and it ended up causing a big mess.”
This was the most embarrassing time for Hernan Mark and Oil World's Slain Levin.
Reputation destroyed!
I was greeted warmly by everyone's ancestors for eighteen generations!
Moreover, until now, they still don't have a grasp of the specific situation.
After Hernan and Slain each had a tantrum in their office, they organized people to investigate the connection.
...
North America, AIG Financial Corporation.
This is also one of the dead bulls in the current grain futures market.
The sharp drop that day wiped out all the profits that AIG had worked so hard to accumulate.
Then it fell again, causing AIG to start suffering losses.
This made Wally Paulson, who was in charge of grain futures trading at the financial company, extremely angry.
One call was made to Duncan Malone of the trading company.
"Look at what you have done. You were played around by that Chinese man like a stupid monkey, without any wisdom at all."
On the other side, Duncan Malone frowned, but luckily he still retained some sanity.
"Fuck! What happened?"
"Fuck you! Didn't you want to buy Jiahe's grain? You bought it at the right time, right at the highest point. Now you have lost everything. We are losing, so you shouldn't have an easy time either," Paulson said viciously.
After hanging up the phone, I saw the unstoppable decline and made the decision to stop the loss in time.
"Already at a loss?"
Half an hour later, Duncan Malone, who understood the whole story, looked confused.
To be honest, grain trading is definitely not something that an insurance company like AIG is good at.
But the potential risks within the federation and the huge profits in commodity trading led AIG to this unfamiliar field.
Originally, the company was making huge profits, but then the profits disappeared and now it is in the red. Duncan Malone can understand Paulson's feelings.
Because just recently, he had completed a spot transaction with Jiahe Grain and Oil.
The two parties have traded several times recently, and the transaction price has been rising steadily.
If you sell it later at the current futures price, you will definitely lose money.
Duncan Malone recalled the last meeting, when the Chinese man looked reluctant.
"These yellow-skinned monkeys really deserve to die! If I had known, I would have taught them a lesson last time."
On the side, Barnes, who also suffered a loss, looked upset.
But anger doesn't help.
Barnes said, "I have his phone number, Guo Yang, the boss of Jiahe! Come and call him."
"Why don't you fight?"
"TNND, the alfalfa seeds are just entering the harvest period, and Netero still wants to buy his alfalfa No. 1 seeds! You don't have to worry about these, just say whatever you want."
Duncan Malone didn't think much about it, he also wanted to find a place to vent.
It took a long time before the call was connected.
After a cordial greeting, the two stopped when they heard no movement from the other side.
"Are you done?" Guo Yang was also a little angry. He was already unhappy after being woken up in the middle of the night and being greeted like that.
“Do you understand grain futures?”
“Isn’t it normal to have ups and downs?”
"This is all normal business trade. Sometimes you should look for your own reasons and ask yourself whether you have worked hard."
"If not, go ask ADM, Bunge, Cargill, and Louis Dreyfus. See if they are yelling or not. Even Monsanto is more rational than you."
Guo Yang took a deep breath and said in a deep voice: "Perhaps I can give you a suggestion. It depends on whether you want to listen to it or not."
"Fuck! What suggestions can save our losses?" Duncan Malone was indignant and was about to hang up the phone.
Barnes quickly said, "Listen to what he says."
Guo Yang whistled, making Duncan Malone grit his teeth in anger, and then he heard the voice from the other side.
“Stop losses in time.”
"Fuck you! Stop loss? Do you know how big a loss that is?" Duncan Malone was furious.
Guo Yang said slowly: "Say hello to Monsanto for me."
"Shit! Why don't you ask yourself..."
But the call was disconnected.
Duncan Malone and Barnes looked at each other and could see confusion in each other's eyes. Monsanto?
"What to do now?"
Barnes thought for a moment and said, "I'll call Callum. He was the one who invited me in."
Duncan Malone nodded and said, "Yes, Guo just said that Monsanto is very calm. I have reason to suspect that Monsanto is setting us up!"
"Fuck! This is really possible!"
A few moments.
Barnes called Callum and then yelled in an angry and out-of-control tone.
"Fuck! We suffered heavy losses from the soybean price crash. Monsanto must give us an explanation!"
He was responded with a greeting that was also highly fatty.
Callum is from Monsanto's grass seed division, but soybeans are one of Monsanto's strengths, so he understands the situation.
However, he still called his colleague, Du Jia Cone from the futures department.
"Huaxia soybean production has increased, and super high-yield soybean seeds have appeared. Monsanto is definitely the one who suffers the most!"
Barnes smiled and said, "Super high-yield soybean seeds? Isn't that what Monsanto is best at? You have already obtained China's genetically modified certificate, so Roundup 2 has entered the Chinese market..."
Duja Kone interrupted angrily.
"Fuck! Give up your wild guesses. China has never allowed Roundup soybean seeds to enter the market."
"That is how the matter?"
"Monsanto is also one of the biggest victims. All the costs we paid in China in the early stage have gone down the drain! In Chicago, Monsanto has also paid a price."
"So North America this year..."
"Stupid, fuck..."
Du Jia Cone hung up the phone abruptly.
There was one thing he didn't say, and didn't dare to say, that a large number of weeds appeared in the soybean fields in Illinois.
This weed, like genetically modified soybeans, is resistant to the effects of glyphosate!
There are even rumors that agricultural chemical service companies increased the amount of glyphosate used in order to kill weeds, but the weeds were fine and the soybeans were the first to curl and shrink.
Who is GMO?
This is a catastrophe for Monsanto!
How long can this news be kept secret?
In comparison, Monsanto gritted its teeth and swallowed the slight fluctuations in the futures market.
……
Cargill's global CEO Albert is also leading a group of people to analyze the impact of China's increased soybean production.
Cargill will be heartbroken by the fluctuations in the futures market, but it will not care too much and will just make timely adjustments.
What he cares about is the stability of the global industrial chain.
The development of corn fuel ethanol has driven up corn prices, and corn has taken over part of the soybean planting area.
Therefore, as judged by inform and Oil World, global soybean supply is tightening.
This is also the situation created by the tacit understanding of several major grain traders. The next two years will be a time of bumper harvest.
At this critical time point, huge changes have occurred in China, the main terminal market of the global industrial chain.
In the conference room, heated discussions were still going on.
"Let's have another soybean war. If we can defeat him the first time, we can defeat him the second time as well!"
"Use your head to fight? There is no price advantage this time."
"Then lower the price! Lower it to a cost they can't accept, just like last time!"
"Oh, it's difficult!" The person who spoke shook his head. "This time, China not only increased the planting area, but also significantly increased the yield per unit area, which also reduced the production cost per ton of soybeans. Now it is difficult to judge who has the lower production cost."
"It's hard to win a price war in a short period of time, and both sides may suffer losses!"
The more we discuss it, the more frightened we become.
The increase in sown area can be ignored, but the increase in cultivated land area makes people frown, and the increase in yield makes people feel that something is wrong!
Because seed promotion is a process.
Once the breakthrough seeds are available, the country's average soybean yield will increase rapidly within 3 to 5 years.
The more it grows, the higher the benefits and the lower the costs. The only remaining advantage of American soybeans may be scale...
In the next few years, the ownership rate of important terminal markets in this global industrial chain will become higher and higher.
"Actually, there's no need to panic."
A grain analyst's voice echoed in the silent conference room.
Instantly, everyone looked over.
Albert also motioned for him to continue.
The analyst nodded and said, "China is a fast-growing market. This year's soybean consumption is expected to be 4900 million tons, but by 2010, our forecast is that the figure will be no less than 6000 million tons, and it will continue to grow rapidly. By 2016, consumption will exceed 1 million tons."
"If Huaxia soybean yields 400 kilograms per mu, it will require 5 million mu of land."
"To produce 500 kilograms per mu, 4 million mu of land is needed."
"To achieve a yield of 600 kilograms per mu, million mu is needed."
"To achieve a yield of 700 kilograms per mu, million mu is needed"
"The yield is 800 kilograms per mu, million mu..."
As the analysts spat out cold data, everyone gradually calmed down.
Nothing is more useful than speaking data.
Even though China's soybean self-sufficiency rate has reached 60% this year, it is still the world's largest soybean importer.
Consumption is growing rapidly.
But it is impossible for yields to grow indefinitely in the short term.
Even if China reaches the threshold of 400 kilograms of yield per unit area and catches up with America, what about the land?
Someone said, "An authoritative report says that China has added more than 4000 million mu of arable land in the past two years, and it is expected to increase by another million mu next year. After the coastal reclamation is completed in the next few years, there may be an increase of tens of millions of mu..."
This was another bucket of cold water poured on me.
The analyst said calmly: "There are about million acres of saline-alkali land in China's coastal areas. Excluding wetlands and ecological land, it can be counted as an increase of million acres of arable land."
"If all of these million mu were planted with soybeans, that would only be million mu, with a yield of 400 kilograms per mu and a total output of 4300 million tons. If the yield per mu were 500 kilograms, the total output would be 5375 million tons..."
"Okay, forget it, the overall trend will not change." Albert interrupted.
"In any case, the increase in Huaxia soybean production and its resistance are not good news for us."
"Continue to close bearish positions?" asked the futures analyst. Previously, Cargill responded immediately as soon as the bad news came out.
"No need." Albert said, "It's only an additional 1000 million tons. The market has almost digested the bad news." After the meeting, Albert called a director.
The other grain merchants also had different reactions. Some chose to fight back, while others chose to temporarily avoid the attack.
But they all quickly stabilized their positions. After all, they are large companies with hundreds of years of history. The risks are controllable and the pricing power is still firmly in their hands.
It’s just that this time the opponent is more resilient.
...
September 13th.
After three consecutive trading days of decline, Informa Economics and Oil World urgently released the latest supply and demand reports.
We still maintain our previous judgment that global soybean supply is tightening.
In previous judgments, the production prospects of soybeans in the United States and Brazil were lowered, offsetting the increase in Argentina's soybean production.
But this time, although the data given by the two institutions were slightly biased, they both tacitly lowered the production of soybeans in the United States and Brazil again.
America: 7400 million tons - 7250 million tons.
Brazil: 6100 million tons - 5970 million tons.
Brazil is suffering from the effects of climate change, while in the United States, red fire ants are spreading again and soybean fields are being harmed by stubborn weeds.
In addition, Oil World also judges that global soybean consumption is still far higher than production.
At noon that day, a spokesman for the Federal Department of Agriculture also stated: "In order to reduce dependence on fossil fuels and reduce greenhouse gas emissions, European and American countries are actively developing the biofuel industry, and the production of biodiesel using soybean oil as raw material is increasing year by year."
"In the long run, the rapid development of biodiesel will lead to a significant expansion of soybean oil consumption."
Meanwhile, Prime Minister Bush will sign a new energy bill in December.
After several consecutive fires, the Chicago Mercantile Exchange soybean contract quickly stopped falling and began to rebound rapidly.
...
September 15th.
Looking at the rapidly rebounding market, Guo Yang was wondering whether to continue?
In the past few trading days, Jiahe Grain and Oil and Weiguang Company have completed a large amount of capital inflow at low levels.
A rough estimate.
At the beginning of the year, 30 billion yuan of funds entered the market. In the middle of the year, the 30 billion yuan reserved as a reserve fund was also gradually poured into the market.
At that time, the leverage was , and the leveraged funds were 270 billion yuan. The cumulative floating profit in the past six months was nearly 20%.
That is 54 billion yuan! Compared with the original capital of 60 billion yuan, the profit reached 90%!
And this time,
First, he adjusted his position to short, and then he went long, taking the opportunity to adjust the leverage to about 6 times, which is about 6/*270=360 billion.
Subsequently, the floating profit of 54 billion yuan was used to increase positions, 54*6=324 billion yuan!
After selling grain, 124 billion yuan was recovered, and this time only about 30 billion yuan was earned, and a leverage of 6 times is about 180 billion yuan.
The total is 864 billion yuan!
The rapid stop in the decline of Chicago soybean futures contracts was closely related to Jiahe’s massive entry into the market.
In the past few trading days, Chicago soybean futures trading has been very active, with daily trading volume reaching US$200 billion, and even exceeding US$ billion at its peak.
嘉禾这次实际新入场的资金864-270=594亿元，，每天的新入场资金约20亿美元。
Minimize outside attention.
In the past few trading days, the fluctuation range of decline and rebound was close to 16%, which gave Jiahe a lot of room for operation.
The account yield reached , with a book profit of approximately 101 billion yuan.
相比原始资本30+30+54+30=144亿元，！
Of the 124 billion yuan of funds recovered from the sale of grain, about 94 billion yuan has not yet entered the market.
But even so, Gao De, Yang Cheng and others were terrified.
"Boss, do you want to close the position?"
Guo Yang hears such things every day, but how can he close his positions before the real show begins?
This time the book profit increased by 101 billion yuan, the risks of each account have dropped sharply, and they can still be sustained!
There is still 94 billion left from selling grain. Should we use it to buy spot goods?
This is indeed a way to go, because the spot price is also expected to rise in the future, and you will not lose money by buying grain.
But first of all, soybeans, corn and rice have not yet started to be harvested on a large scale, and there is still a gap of one or two months.
And there is an unexpected factor.
corn!
Corn production will also increase this year!
Guo Yang's original idea was to hold on to the sales data of Tianyu No. 1 seeds in his hands and wait for international grain traders to deliver a fatal blow.
However, the situation has changed now.
Because of soybeans, international grain traders and domestic institutions have increased their research on production areas.
It just so happens that spring corn has entered the harvest season.
It is very likely that we will meet each other.
Farmers in some production areas, such as the Huanghuaihai area, who have planted spring corn, have already announced the good news of a good harvest.
There are many local reports.
The yields that can be reported are not low, basically around 3000 jin per mu.
The city of Quanzhou in particular suffered from heavy rains this summer, but some places were still able to produce more than 2000 kilograms.
What's more, farmers in some places in the Northwest who tried to grow Tianyu No. 8 silage corn achieved super-high yields of more than 4000 kilograms per mu.
It's hard not to notice in this situation.
It would be better to be straightforward and take advantage of the increase in corn production and do something in the corn futures market.
The actual planting area of Tianyu No. 1 is over 2 million mu.
The increase in production is over 6000 million tons.
Even more boldly, more than 7000 million tons is not impossible.
In addition, a lot of crops such as soybeans have been converted to corn, with 610 million mu in Heilongjiang Province alone and more than 100 million mu in Jilin Province.
Including the Huanghuaihai and other production areas, the country's corn planting area this year is million mu, an increase of more than 1600 million mu over last year.
Let’s assume it’s 1000 million tons here.
Total production is expected to increase by 7000 to 8000 million tons, reaching more than million to million tons.
You know, last year China's corn production increased significantly, resulting in a surplus of 20 to 30 million tons.
As a result, the National Development and Reform Commission did not ultimately stop the development of domestic corn bioenergy.
This year's total demand is also several million tons higher than the original time and space, reaching million tons.
But there is still a surplus of to million tons.
By the same token, as corn yields increase and unit costs decrease, domestic corn prices will definitely drop significantly.
At this time, the advantage of export is there, and the impact on the international market is far greater than soybeans.
Guo Yang was playing with the newly harvested corn cobs in his hands, pacing back and forth in the office, thinking over and over again.
If there are no other variables, the food crisis led by the four major grain traders may end up being a dud next summer.
But there are variables!
Still in North America!
Red fire ants and caltrops.
The damage caused by these two types of animals and plants this year will probably be considerable, but the peak will definitely be next year.
Corn, soybeans, wheat and cotton in the Midwest of the United States will all be affected.
Food crises will still come.
There was just one more fluctuation in the middle.
He should be the only one in the world who can accurately predict this news, right?
It's done!
The situation has come to this.
The longer the night is, the more dreams we will have. The longer you delay, the harder it will be to grasp the future!
Having made the decision, Guo Yang took action.
First, he gave instructions to Gao De and Yang Cheng: short domestic and international corn futures.
After estimating the time difference and waiting until the Chicago market opened, Guo Yang called Director Lin and Director Nie one after another.
The focus was on the actual corn production situation, and Jiahe’s operating direction was briefly mentioned.
Given the current situation in China and North America, international grain traders and capital probably have no intention of coming to China.
Then we have to take the initiative.
……
Beijing.
After receiving the news, Director Lin and Director Nie met immediately.
"It's not easy!"
" million tons, this output is only million tons less than that of the United States!" Director Nie laughed and said, "I have never fought such a rich war!"
Lin Bu said worriedly, "You are rich now, but I just feel a headache now. I don't know how much corn will be unsold this year! I don't know what will happen to the domestic futures market."
"Why is this so difficult? Crude oil prices are high, and processing it into bioenergy is much more exciting."
"It takes time to build a factory and expand production capacity!" Lin Bu said, "It's mainly because it happened too suddenly. The futures market is unstable..."
"You have to lose something if you gain something. It's good to have this opportunity."
"That's true. It's a pity that corn feed cannot completely replace soybean feed. Otherwise, this would be a permanent solution."
"Hey, you're taking advantage of me. Next year, farmers will plant less corn and more soybeans." Director Nie raised his eyebrows. "If you say that, even if international grain traders don't come to cause trouble, we will still suffer heavy losses!"
After chatting for a while, Lin Bu got down to business. "Jiahe wants to take the initiative. What do you think about this?"
Director Nie raised the corners of his mouth and said with a smile: "I've already said that I've never fought such a rich battle. Just do it."
...
September 16th.
Dalian Commodity Exchange, Information Department.
Manager Zhang Xingbao came to the office as usual, made a cup of tea, and took today's newspaper.
These days, the hottest news is the significant increase in domestic soybean production.
Even someone like him who was used to big scenes couldn't help but feel secretly frightened.
More than 10 million tons...
He shook his head and read the newspaper.
"puff……"
He spat out the tea before he could even finish a sip.
He rubbed his eyes, looked again, and confirmed again and again that he was not mistaken.
The bright red headline - National corn production reaches million tons! A surge of 8000 million tons! A cumulative increase of million tons in two years!!!
"What inferior newspaper..."
Before he could finish his sentence, he saw some familiar words on the Grain and Oil Market News.
This is the only authoritative newspaper in the domestic grain and oil system.
It is distributed nationwide, is highly professional and contains a large amount of information. Almost all grain and oil companies and financial institutions subscribe to this newspaper.
If he is not up to standard, there will be no authoritative grain and oil media in the country.
There is no doubt about the authenticity.
Zhang Xinbao was a little dizzy for a moment.
8000 tons?
Cumulative increase in production by million tons?
These two numbers... are like dropping a blockbuster bomb into the calm lake!
How is this possible!
Even the Grain and Oil Market News may not be without mistakes.
But as Zhang Xinbao read further, he learned in detail the source of the increased corn production.
The planting area of Tianyu No. 1 is over 2 million mu. Even if there is drought or flood, the average yield per unit area can still remain stable at over 2500 jin!
The sown area also increased by 1600 million mu.
Tianhe’s new variety of silage corn, Tianyu No. 8, has created an ultra-high yield record of more than 4100 kilograms per mu by farmers!
Isn't this silage corn? How come you can harvest so many corn cobs?
The front-page headline of the Grain and Oil Market News that day attracted everyone's attention as soon as it came out.
There is no more terrible bad news than this. The price of corn futures on the Dalian Commodity Exchange plummeted.
Countless funds were liquidated and the market was littered with corpses. Because the scene was so tragic, futures traders defined this day as the Corn Disaster Day.
At this time, the afternoon session of the Chicago Board of Trade had already ended, and there was less than an hour left before the night session opened.
But it's enough for information transmission.
(End of this chapter)
