Market attention is turning to corn as traders monitor the potential impact of a major typhoon.

The center of Typhoon "Bavi," the ninth typhoon of the year and classified as a super typhoon, was located approximately 1,210 kilometers southeast of Keelung City, Taiwan, at 5 a.m. on the 9th. It is forecast to move northwest at 15-20 kilometers per hour, gradually approaching the northeastern coast of Taiwan Island. It is expected to make landfall or brush past the northern coast of Taiwan on the 11th, before moving towards the central coast of Fujian to the southern coast of Zhejiang, gradually weakening in intensity.

As a massive super typhoon with a diameter exceeding 1,000 kilometers, "Bavi" is not merely passively following air currents. It possesses its own inherent northward drift force, which can counteract and resist external steering flows. The typhoon's asymmetric convective structure can lead to irregular deviations, and its vast circulation can disturb surrounding atmospheric patterns, further exacerbating path uncertainty. The typhoon's trajectory after landfall is equally critical, directly impacting the scope of its effect on agricultural production regions.

If a strong high-pressure system to the north acts as a barrier, the typhoon's circulation could stall near Henan, bringing persistent extreme heavy rainfall to central and northern China. This would affect the corn and soybean production areas of the Huang-Huai-Hai region, where Henan, Shandong, and Hebei account for approximately 30% of national corn output. Conversely, if the high-pressure system retreats eastward, the typhoon could move north along its periphery, potentially even penetrating deep into Northeast China. The three northeastern provinces and Inner Mongolia contribute over 40% of the nation's corn production. A scenario reminiscent of 2020, where consecutive typhoons "Bavi" and "Maysak" caused widespread lodging, would have a significant impact on corn supply.

For comparison, the consecutive typhoons "Bavi," "Maysak," and "Haishen" in September 2020 caused extensive corn lodging in Jilin and Heilongjiang. Against a backdrop of tight domestic corn supply and demand at the time, this triggered a price rally exceeding 15%. Similarly, in late July to early August 2023, the dual typhoons "Doksuri" and "Khanun" initially forecast to hit Northeast China, but ultimately dissipated in the Bohai Bay, led to a volatile market. This resulted in a pattern of buying on expectation and selling on reality, with prices first rising 150 points before falling back 150 points as the forecast was disproven.

In contrast, Typhoon "In-fa" in July 2021 swept across 10 provinces and cities after landfall but had limited actual impact, with market moves driven more by sentiment. The typhoons "Hinnamnor" and "Muifa" in September 2022 had a limited effect on production areas, causing localized waterlogging in parts of central and eastern Heilongjiang, while the national autumn grain harvest remained strong, resulting in limited futures price volatility. Typhoon "Gaemi" in September 2024 mainly made landfall in South China, having a minimal impact on corn-producing regions.

Currently, spring corn in Northeast China is in the jointing stage, approaching a critical and sensitive period in the planting cycle. Corn in North China is in the seedling stage. Weather forecasts indicate significant divergence between the Northeast and North China corn belts over the next 15 days, with the Northeast expecting more rain and lower accumulated temperatures, while North China faces less rain and higher temperatures. The focus is on the potential impact of rainfall and strong winds from this typhoon on these two major production regions after landfall.

The current domestic corn market is facing pressure from policy-driven auctions of aged stockpiled rice and competition from wheat for feed use, leading to weak spot and futures prices. Coupled with an increase in acreage for the new season, the market is in a phase of weak current fundamentals and weak forward expectations. Nearby futures contracts are trading at a discount to spot prices, and the calendar spread structure for the September, November, and January contracts shows a pattern of successive monthly discounts.

However, considering that the land rental costs for new-season Northeast corn translate to a futures price equivalent of approximately 2,250-2,300, the potential for further significant downside is seen as limited. Additionally, current corn price volatility is at relatively low levels. Market participants are watching to see if expectations for both the futures and spot markets shift following the typhoon's landfall.

In summary, beyond considering the potential weather premium from the typhoon, the specific landfall path is crucial. The 2020 typhoons penetrated deep into the Northeast, while the 2023 event resulted in a "buy the rumor, sell the fact" pattern. Furthermore, the underlying supply-demand dynamics and valuation levels remain the core drivers. The domestic corn market is currently characterized by weak realities and expectations, yet far-month contract valuations are relatively low.

Although the domestic market's sensitivity to weather is typically less pronounced than that of the CBOT, the July-September period represents a critical growth stage for corn in the Northern Hemisphere. Therefore, ongoing monitoring of weather disruptions is essential in the coming period. In the near term, the focus is on the path of Typhoon "Bavi." The medium-term outlook will depend on actual yield developments.