Market Outlook for June:

Short-term perspective: We believe that sorghum and barley supplies in the South China market will remain ample through June and July. Coupled with the gradual commencement of alternative feed sources such as sprouted wheat and targeted feed rice releases, we assess that short-term supply pressure exists.

However, from a valuation perspective, if corn prices at northern ports continue to decline, the value proposition of targeted feed rice diminishes, potentially leading feed mills to revert to using corn or wheat.

Medium to long-term perspective: From a medium to long-term viewpoint, we still need to evaluate whether wheat prices will rise back above 2,550 yuan per ton after October. This depends on several variables, such as the volume of state-supported wheat purchases and the quantity of wheat used for feed. Therefore, there is significant uncertainty regarding medium to long-term corn prices.

Trading strategy: Based on current valuations and market drivers, we maintain a neutral to bearish outlook for the near month. We advise investors to operate with light positions and keep risks within a reasonable range.