Overview of Key Findings

Due to the widespread substitution of wheat and imported grains, early spring corn in North China began hitting the market in mid-August. By late September, corn from North China will be available in large volumes, with Northeast corn following in October. This has driven spot corn prices steadily lower. This report analyzes the new season's corn planting area and per-unit yield, and provides a price outlook for the market.

Market Outlook

With an increase in corn and grain supply alongside declining demand, traders and downstream enterprises have incurred losses. However, considering the high planting costs for this year's corn, the January contract is expected to trade in a range-bound pattern near the bottom. Spot corn prices for the 2026/27 season are likely to be less volatile than last year. After the new year, as low-priced grains are consumed, wheat prices may rise, and import costs are also climbing. This could lead to a modest recovery in the May and July corn contracts.

Production and Price Forecast for New Season Corn

The current grain supply is ample. With early spring corn arriving in mid-August, large-scale availability in North China by late September, and Northeast corn in October, corn supply is under significant pressure. Prices are following a seasonal downtrend. New season corn supply is expected to be roughly flat year-on-year, but with more grain substitutes available and slightly lower demand, downstream enterprises and traders are facing sustained losses. Spot corn prices are continuing to search for a bottom. This article provides a preliminary assessment of new season corn output and a price range forecast for the 2026/27 season.

Expanded Acreage Meets Lower Yields, Resulting in a Potential Slight Production Increase

Driven by higher corn prices in the 2025/26 season, farmers' planting returns were favorable, leading to an expansion in corn acreage. We estimate that the national corn planting area for the 2026/27 season will increase by approximately 15 million mu (about 2.4% of the national total), with the majority of the increase concentrated in Heilongjiang and North China. In Heilongjiang, soybean acreage is expected to see a significant reduction, with a preliminary estimate of a 15% year-on-year decrease (roughly 10 million mu). This translates to a corresponding increase of 10 million mu in corn area. In Henan, heavy rainfall during last year's peanut harvest drove prices sharply lower, resulting in planting losses. The peanut planting area in Henan for the 2026/27 season is projected to decrease by about 10%, or 2-3 million mu, with the vacated land shifting to corn, adding roughly 3 million mu in North China. Other northwestern regions are expected to contribute an additional 2 million mu, bringing the total national increase to around 15 million mu. However, the per-unit yield for the new season corn is likely to decline. Last year, favorable weather in major producing areas led to a record-high yield, but this year's excessive rainfall in the Northeast is expected to lower yields. We estimate a 3-5% decline in Northeast yields compared to last year, and a slight 1.1% decrease nationally. With higher acreage offsetting lower yields, total corn production is projected to be roughly flat year-on-year. Given the persistent rainfall in the Northeast, yield estimates may be subject to further downward revision.

Abundant Domestic Substitutes and Slightly Weaker Demand

Heavy rainfall during this year's wheat harvest has resulted in generally poor quality, significantly increasing the volume of feed-grade wheat. It is estimated that around 40 million tons of wheat will be used for feed this year. With wheat prices remaining low (currently near 2,350 yuan/ton) and the wheat-corn price spread narrow, the proportion of wheat in feed rations is high. It is expected that feed wheat will continue to replace some corn demand for the remainder of the year, keeping leftover grain supplies ample. As of early August, a total of 4 million tons of brown rice had been offered for auction, with 2.27 million tons sold. At the current pace of bi-weekly auctions, monthly supply exceeds 1 million tons. Imported grain volumes are higher than the same period last year. From January to June, corn imports totaled 1.01 million tons, up 210,000 tons year-on-year. Sorghum imports reached 3.76 million tons, an increase of 1.64 million tons. Barley imports hit 8.16 million tons, a rise of 3.01 million tons. Combined imports of corn, sorghum, and barley for the first half of the year stood at 12.91 million tons, 4.85 million tons higher than the same period last year. Domestic corn carryover stocks are also high. Due to the substitution of wheat and imports, this year's corn carryover is estimated at around 20 million tons, with about 15 million tons in the Northeast and 5 million tons in North China.

Price Forecast for Corn

Rising land rents for the 2026/27 season are driving a significant increase in planting costs. Land rent increases in Heilongjiang and Jilin are roughly 200 yuan/mu, while in Liaoning the increase is between 100-150 yuan/mu. Based on Heilongjiang's cost structure, the break-even port price is estimated to be around 2,300 yuan/ton. However, given the losses sustained by traders, feed mills, and deep-processing enterprises, farmers and end-users are locked in a difficult pricing battle. With high carryover stocks, corn prices are expected to fall below the cost of production. With ample spot supply and weak demand, price volatility is likely to be lower than last year. In the 2025/26 season, the northern port ex-warehouse price ranged from 2,100 to 2,420 yuan/ton. The lowest prices in Suihua, Heilongjiang were around 1,970 yuan/ton (dry grain), in Changchun, Jilin around 2,000 yuan/ton, and in Weifang, Shandong near 2,130 yuan/ton. For the 2026/27 season, the price trough is expected to be higher than last year, but the peak is likely to be lower. The forecast range for the northern port ex-warehouse price is 2,200-2,400 yuan/ton. In Suihua, Heilongjiang, the low point for dry grain is estimated at 2,050 yuan/ton; in Changchun, Jilin, around 2,100 yuan/ton; and in Weifang, Shandong, approximately 2,200 yuan/ton. Before the new year, ample supply and weak demand will keep prices in a narrow range. However, after the new year, supply will tighten, leading to increased volatility. In the second quarter, as old-crop wheat stocks are nearly depleted, wheat prices may rise. With corn inventories shifting to traders and downstream enterprises, and import costs increasing, domestic corn could see a slight uptick. This presents a buying opportunity for the May and July contracts. On the futures market, the January contract is expected to trade around 2,200 yuan/ton, the May contract in a range of 2,240-2,350 yuan/ton, and the July contract between 2,250-2,400 yuan/ton.

Risk Disclaimer

This content is for reference only and does not constitute investment advice. The futures market carries risks, and entry requires caution.