Cereal prices continue to rise, and the dispute between grain and cotton

Because of the rise in the prices of wheat and corn, the land dispute between crops will again “reappear”.

From the perspective of the history of the trend of agricultural products, the shift in planting areas of different crops has led to price transmission mechanisms among crops. Agricultural products, such as corn, wheat and soybeans, maintain a close price interaction among them. The differences in crop planting benefits implied by the parity effect directly affect the competition between crops. For example, the price parity ratio between CBOT soybean and corn is between 2.2 and 2.4. If the ratio between the two exceeds this range, it will change the cultivation intention of farmers in the next year, which will cause changes in soybean or corn planting area.

Today, similar "resonance" will also affect the relationship between cotton and wheat, corn and other crops. With the soaring domestic and foreign grain prices since the New Year, cotton, a species that has “intersection” with grain, seems to be losing its competitiveness in the hearts of farmers. People give this kind of phenomenon a good name -- "grain and cotton dispute."

If we only look at the performance of agricultural prices in 2010, it is not worth mentioning any species and the soaring of cotton. The rise in cotton prices is quite explosive. Zhengzhou cotton futures prices have risen more than 90% between August and November of last year, rising from 17,000 yuan per ton to 33,000 yuan, while the price of US cotton in the same period has almost doubled. During this period of collective soaring of agricultural products, despite the strong rise in grain prices, the increase in US corn prices was only 50%, and the price of wheat was due to advance overdue in June and July of last year.

An authoritative forecast in the industry shows that as cotton prices have soared in the past year, the cotton acreage of major cotton producing countries is also expected to increase significantly. It is estimated that in 2011/2012, the cotton planting area in China will increase by 4.1%, and the cotton planting area in the United States will increase by 14%.

The benefits of growing cotton are obvious. According to a statistics before the Chinese New Year, if the cotton output per mu is 410 kg, the corn yield is 1020 kg, the wheat yield is 1120 kg, and the spot price at that time, the total income per mu for wheat and corn is 2,115 yuan. The cost is 1559 yuan, which is much lower than the income of cotton planting. Farmers can adopt the first wheat planting method every year and the later planting of corn. However, the growth of cotton is only one season. From March to April of the calendar year, the industry has added wheat and corn planting area to calculate the “grain and cotton price ratio”. "habit.

"Only from the price point of view, according to the estimates at the time, it seems that cotton is more cost-effective than grain." Shanghai's mid-term analysts said thunder.

However, the foundation of cotton quickly shakes with the strength of the grain. Just over a month after the New Year, the price of US CBOT wheat soared from more than 800 cents per bushel to more than 930 cents. The price of CBOT corn returned to 700 cents for the first time since July 2008 and rose more than 15% in a month. The US Department of Agriculture has repeatedly lowered grain yields and inventories are expected to be the key to the resumption of external corn and wheat gains. In the USDA’s latest February report, U.S. corn stocks estimates touched almost 15 years of new lows, and inventory ratios were even lower. It was the lowest since the Great Depression in the United States. Extremely good corn also "spill" to wheat, cotton and other crops. A head of an investment company in the United States even said: "The price of corn is growing strongly and cotton must defend its own planting area."

In China, investors are more concerned about the continued drought conditions in the main wheat producing areas. On Wednesday, the funds also helped Zhengzhou's strong wheat futures hit a rare 7% increase since it was listed on the market. This species also entered for the first time every year. The age of 3,000 yuan. In addition, worries about drought conditions also seem to have spread to other agricultural product futures sectors, and a large number of varieties have seen a large inflow of funds. In the past two trading days alone, domestic wheat futures positions have increased by more than 140,000 contracts, and corn futures have also added more than 96,000 contracts. See thunder said: "From the price point of view, last year may see only the rise of cotton, and now wheat, corn, etc. are also up, and they feel a bit like a battle with the cotton."